Damian Collins

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GUEST OBSERVATION
Most property investors usually aspire to building a portfolio of more than one investment property.
However statistics show that the large majority of Australian property investors (72%) own only one investment property – so what’s holding them back from buying more?
Most investors don’t understand the key seven steps they need to follow in order to set themselves apart from the average investor.
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The first step to building a property portfolio is to develop a long-term plan on how you will achieve your property aims. Creating and following a property investment plan is a simple yet effective way to help you reach your goals. Developing a well thought out plan is key to achieving success in any facet of life, whether it be in your career, sporting event or personal ambition, and property investment is no different. The aim of a thorough property investment plan is to outline what you have to do in order to achieve your goals in the shortest possible time. Your plan should cover your risk profile, current situation and financial capacity. From there you should develop a long-term plan identifying the types of properties that are suited to your portfolio, the estimated time frames you can achieve those goals and what steps you need to take to achieve them. It is also important to break those big goals into smaller steps and develop a specific action plan to achieve them. 
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Once you have developed a plan, the second step is to organise your finances to enable you to purchase an investment property. Most banks and brokers do not know how to structure loans in order for property investors to build large portfolios. Make sure you deal with a broker who specialises with investors and who understands the dangers of cross collateralisation. 
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The third step is to acquire your investment property. This part is crucial, as the performance of the property you choose will have a significant impact on the time frame you can purchase your next property. Choosing an investment property requires substantial research into markets around Australia and also detailed analysis of suburbs and the individual property. If you don’t have substantial time and energy to dedicate to the process, then consider using a buyer’s agent to help you. 
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<li>The forth step in building a property portfolio is to look at ways you can add value to your existing property. Rather than wait for the market to increase in value, savvy investors look to add value to their properties through renovations or development, which speeds up the wealth creation process. </li>
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The fifth step is to effectively manage your property to achieve maximum returns. Unfortunately, many investors will choose the cheapest property manager. Ultimately you get what you pay for and a good property manager should be up to date with market rent reviews and be able to give you advice on ways you can cost effectively add value to the property in order to generate higher rents. 
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The sixth step is to work on your property education. If you have good advisors who can help you with the first five steps, then you don’t need to become an expert in property. However, it is still your money being invested and I’d always recommend you have some level of knowledge, as it will help you be more confident in your advisor’s recommendations. 
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The seventh step is to regularly review your portfolio. Sometimes along your property journey you may find that some of your properties are no longer suited to your investment criteria, or the property is no longer a good investment. Too many investors hold onto unsuitable properties. A regular review and honest analysis will help you make the right decisions.
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If you follow the seven step strategy, then your next property purchase shouldn’t be too far away.
When you are ready to buy again, that’s the time to review and update your property investment plan and start the seven step process to help you continue to build your property portfolio.
Fast facts:
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<li>72% of property investors who own one property</li>
<li>18% of property investors who own two properties</li>
<li>5% of property investors who own three properties</li>
<li>2% of property investors who own four properties</li>
<li>1% of property investors who own five properties</li>
<li>1% of property investors who own six or more properties</li>
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Source: Australian Taxation office
Damian Collins is the founder and managing director of <a href="https://www.momentumwealth.com.au/" target="_blank">Momentum Wealth</a>, a Perth-based property consultancy that specialises in building the long-term wealth of its clients by assisting in the strategic selection, financing, acquisition, development and management of their investment properties.
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DamianCollins-BiwU8NaWEC

The seven steps to beat the odds and build a large property portfolio

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GUEST OBSERVATION
It is shaping up to be the year of the buyer as favourable market conditions create an opportune time for investors in Western Australia.
While capital growth is widely tipped to be moderate in the Perth property market for the year ahead, the next 12 months will provide a good platform for investors to build their property portfolios for several reasons.
Firstly, we can be confident that finance will remain cheap as interest rates stay at record lows. The large majority of industry analysts are predicting that the Reserve Bank of Australia (RBA) will not hike rates this year.
Secondly, we have seen a 28% increase in housing stock available in Perth over the past year with the number of listings surpassing 13,000 at the end of 2014.
This provides investors with a much wider choice and buyers are more likely to find a better suited property to their needs.
Thirdly, given the softer outlook for the Perth property market, many buyers will delay their decision to acquire a dwelling until conditions improve.
This simply boils down to human nature as many investors take a herd mentality and become discouraged when the market isn’t recording robust capital growth.
As many buyers delay a property purchase, those that do choose to invest in property will encounter less competition.
Subsequently, investors can get more bang for their buck or are able to secure properties for less, or even below asking price, as reduced competition means buyers are less likely to be forced to outbid others.
Finally, buyers in softer markets will have more control over contract negotiations as less competition means they can be more demanding of sellers. We are already seeing great properties being purchased at fair prices.
While we don’t expect huge capital growth for the Perth property market, the fact is that cheap finance, higher stock levels and reduced competition means buyers will have the upper hand.
The long-term fundamentals for Perth remain very strong. It is forecast to have the fastest growing population and fastest growing economy over the next 10 years.
Warren Buffett famously said, “Be fearful when others are greedy and greedy when others are fearful”.
Those who make the most of the current favourable conditions and invest wisely in the next 12 months will be best placed to take advantage of the next upswing in the property market.
Damian Collins is the founder and managing director of <a href="https://www.momentumwealth.com.au/" target="_blank">Momentum Wealth</a>, a Perth-based property consultancy that specialises in building the long-term wealth of its clients by assisting in the strategic selection, financing, acquisition, development and management of their investment properties.
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Conditions favouring buyers in Perth: Damian Collins

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GUEST OBSERVATION
Half of Perth’s metropolitan councils are dragging their heels in meeting the Western Australian government’s urban infill development targets, according to a progress report.
One of the key aims of the state government’s planning blueprint Directions 2031, which was released in 2011, was to increase housing densities to slow Perth’s urban sprawl and accommodate 3.5 million people.
As part of the measures, the WA government set a long-term urban infill target of 47%, which means 47% of new residential developments must be built within established suburbs in the two decades to 2031.
However a report card on the blueprint released by the state government recently revealed that just two (Claremont and Kwinana) of the 32 local councils were currently meeting the target.
It found that 14 councils were tracking towards the target while 16 councils, or 50%, were stuck in the ‘early planning phase’.
<img src="/images/2015/02/23/collions-feb-23-one.jpg" alt="">
Source: Directions 2031, Damian Collins.
Local councils falling behind the target include Subiaco, Cambridge, Melville, Nedlands, Canning and South Perth, among others.
The report stated: “These initial figures suggest that there would have to be a significant increase in residential infill development over the next three years if short-term infill targets are going to be met.”
Although Directions 2031 is a 20-year plan, local councils need to start taking substantial action now in order to meet the state government’s target.
While I acknowledge that Perth councils have been distracted by the WA government’s failed amalgamations agenda, some councils have simply sat on their hands purely because they’re against higher density.
However, if Perth is to adequately accommodate and manage its rapidly growing population, a concerted effort is needed by all local councils to offer a mix of housing options.
Councils need to create their own planning schemes to meet the objectives of Directions 2031, including rezoning to allow high-density housing in strategic areas of their precincts, including around transport hubs and shopping and activity centres.
The report card on Directions 2031 was released just months after the Western Australian Planning Commission (WAPC) revealed that Perth’s infill rate was actually declining, despite the push to increase infill developments.
The WAPC report, using the latest figures available, found that the infill rate dropped to 28% in 2012, down from 32% in the previous year.
Failing to meet the infill targets will only increase pressure on Perth’s public infrastructure, particularly its road networks, and force more people to live on the urban fringe.
Damian Collins is the founder and managing director of <a href="https://www.momentumwealth.com.au/" target="_blank">Momentum Wealth</a>, a Perth-based property consultancy that specialises in building the long-term wealth of its clients by assisting in the strategic selection, financing, acquisition, development and management of their investment properties.
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Damian Collins

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