Planning for the New Financial Year: Property Investment

July is always a great time to start planning your funds for the year ahead, as you have done half the work whilst collating your finances for your tax purposes. Use this to your advantage by utilising the numbers you’ve calculated to finalise your plans for property investing over the next year.


Take a look at your finances

Our suggestion involves creating a financial plan, outlining how you will build, develop and protect your financial goal of building a stronger property portfolio. A financial plan is a process applicable to a range of circumstances, yet is an integral step in property investment planning.

The start of a new financial year is a good time to perform an annual review of your asset distribution to ensure your portfolio is constructed appropriately. Try listing all of your assets, including incomes, and work out your associated expenses over the next 12 months. This will give you the chance to decipher just how much monies you have to work with.

Set investment goals

The end of the financial year is the perfect time to reflect on your long-term investment goals. What kind of investments are going to align with your long-term lifestyle goals? Perhaps this year you want to focus on diversifying your investment portfolio, including a range of different property types such as houses, units and apartments.

Think about what simple steps you will need to take to achieve that goal. When it comes to investing in property, it can be easy to get distracted or daunted by numbers and options, instead of concentrating on a clear set of goals.

Consider breaking these steps into weekly goals. For example, who do you need to meet with, what do you need to learn, who do you need to call? Smaller weekly goals such as these will keep you focused on what needs to be done, without overwhelming you.

Consider a Financial Advisor

A financial advisor acts as an instructor for your money, offering knowledge and guidance to identify and help you achieve your specific investment goals. As a qualified professional, they are committed to helping your detect the investment possibilities that are right for you.

If it has been a while since you have visited your advisor, or perhaps you haven’t required financial advice before, then the start of a new financial year can act as your annual reminder to meet with a planner and start the new financial year on a strong investment front.

Develop a budget

Buying, selling and managing investment properties can be costly and will affect your overall return on your property portfolio. The start of the financial year is the perfect time to calculate what kind of expenses you are up for over the coming 12 months. For instance;

Stamp duty Council rates Agent’s fees
Conveyancing fees Water rates Advertising costs
Legal costs Insurance Legal fees
Search fees Land tax
Pest and building reports Property management fees
Repairs and maintenance costs

Take note: If you are relying on rental income to finance some of these costs, consider whether you could cover all expenditures in the short-term if you had no tenants for a period of time.

Check your tax effectiveness

You can claim tax deductions through holding property throughout Australia. This enables you to reduce the amount of taxable income payable to the ATO at the end of the financial year. For more about making the most of your tax, read our article on maximising your tax return from investment properties here.

Think about risk

In terms of investment, risk refers to the chance that you will be unable to derive the outcome you want from your outlay, and in property there is a certain amount of risk with every investment. This is mostly due to the market being very volatile and difficult to predict.

For example, perhaps you predict your investment will generate a growth of 5%, but in fact it makes a loss. It is impossible to avoid all risks when you are investing in property but if you are aware of them, then it is easier to understand and take into consideration.

About peardrealestate

Peard Real Estate is an award winning network of boutique offices throughout Western Australia delivering innovative property solutions, services and results for home owners, landlords and investors.
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