Building an inner circle for your property investment journey

When a friend appears to be doing well off of investments, it’s easy to think you could just replicate what John Doe’s done to set yourself up for financial success. But as George Cherchian, founder of James Chase Buyers Advocacy, said recently on an episode of the Smart Property Investment Show, every individual's property investment journey is unique, and it is important to recognize and embrace these differences.

Factors such as age, income, and financial goals play a significant role in determining the investment strategy that suits each individual, Mr Cherchain remarked. For example, someone in their 30s may prioritise property growth over cash flow, while someone on a modest income may value high yielding cash flow positive properties.

A good buyer's agent understands the importance of tailoring a plan according to their client's financial position, goals, and aspirations. They help investors realise that they are not in competition with others and emphasise the need to focus on their own journey.

At Mr Cherchian’s firm, he reminds clients to keep their eye on that goal: to create financial stability and a lifestyle that aligns with their desires. A strategy that worked for one person might place someone else in a financial strained position.

This is why the acquisition phase of property investment can be challenging, because as much as you start out with one set of circumstances and a stated aim, life can sometimes have other plans, and it can be difficult to predict the intervening factors that might mean a property investor should change tact.

Mr Cherchain noted that it’s crucial to approach the acquisition phase with the understanding that investing is cyclical. There may be times when an investor can acquire multiple properties before hitting a point where further borrowing becomes difficult due to lending restrictions. On the other hand, unforeseen circumstances like job loss, career changes, or unexpected family obligations can also disrupt the acquisition phase.

The buyer’s advocate stressed that recognizing these indicators and understanding the ebb and flow of the acquisition-consolidation cycle is vital for building a strong foundation in property investment.

In his view, surrounding oneself with the right professionals is crucial to gaining this type of long-term insight in the early stages of property investment.

“A property-savvy mortgage broker, for example, can provide valuable insights on structuring property purchases,” Mr Cherchain explained.

They’ll be able to provide knowledge on questions like how to structure the purchases from a legal perspective.

“If there's two of you buying the property, some things you need to consider include: are you going to buy in one person's name? Are you going to buy in both names? Are you going to buy in an investment vehicle like a trust? And you won't know to consider these questions yet, because you've just started your journey, but the right people around you can definitely guide you because at a certain point you are going to hit that knowledge ceiling,” Mr Cherchain noted.

A good buyer’s agent, too, should be serving to bridge a knowledge gap, wherever you are on your property journey.

In their role, they provide necessary support and guidance to help investors make informed decisions. By leveraging their expertise, investors can gain a deeper understanding of the property market and make strategic choices that align with their financial goals.

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