Strategy essential for investment success
Investors without a clear strategy could be losing out on millions of dollars, according to a leading industry expert.
Director of property group Alliance Corp Jason Paetow told Smart Property Investment most people fail to invest to their full potential.
“Most people don't understand what they can achieve by having the right advice and the right structures,” he said.
The people who fail to plan are less likely to build a strong portfolio, he said.
In Mr Paetow’s experience, two couples in exactly the same financial position could end up with radically different outcomes if one undertakes extensive research and the other minimal preparation.
“In a 10-year period, the second couple might end up buying two or three properties and think they're doing okay,” he said.
“The more informed couple might buy six, seven or eight properties over that period of time.
“If you calculate that over the next 10 years - say having two or three properties versus half a dozen - when you look at the total value of your property portfolio over a period, you could be looking at an excess of $1,000,000,” he said.
Successful investors tend to consult mortgage brokers and planners to formulate a clear way forward, he said.
In Mr Paetow’s experience, this approach helps investors boost their borrowing capacity, increase serviceability and acquire properties more quickly.
In his view, investors need to be aware of the opportunity cost of poor planning.
“You need to understand exactly what your financial goals are,” he said.
While many investors feel safe investing in property, they frequently fail to take steps to plan their approach, he said.
“They don't actually do any proper research. They don't identify what type of strategy they should be implementing to be able to build up a significant portfolio over time,” he said.