10 Rules for Successful Property Investing

Many of our clients ask us about property investments, and the best way to structure these in order to reduce tax.

Buying the right property is key. Recently we came across a list put together by credible property consultant Michael Matusik, and his 10 rules for successful property investment really made sense to us.

Here are Matusik’s 10 rules to help you buy well…

The property must be:

  1. New, or at least recently renovated, to maximise depreciation/tax return and gross rental returns.
  2. In a small or multi-staged development. Preferably under 50 dwellings. Large properties should not be ruled out. They must, however, have substantial points of difference i.e. well-proportioned and well-appointed apartments; quality facilities and finishes; and good access.
  3. In a strong location – “infill” highly favoured, with high existing amenity; a great “walk-score”; and more importantly, potential for above average mid-to-long term capital growth.
  4. In an area with five or more pillars of economic support, including cumulative demographic/rental demand and high employment/wages growth.
  5. Within five minutes of “hard-core” infrastructure i.e. major work nodes; secondary schools; entertainment precincts and public transport, especially rail.
  6. Delivered by a proven development team.
  7. High quality in terms of design; materials and construction. It must require minimum maintenance.
  8. End prices under $600,000; better still, less than $500,000; and they must yield more than a 5% gross rental return.
  9. Limited new dwelling supply when compared to underlying demand.
  10. Sold with independent API registered valuation support, and within an acceptable range of sales/marketing commission.

Matusik’s conclusion…

“So, stick to the 10 and you’ll make millions? Well, short answer – there are no short-cuts and no guarantees. But by following my 10 rules, I believe you can, with a little effort and know-how, convert a modest deposit into a sizeable next egg. But (yes, there is always one), don’t do it blind-folded – seek independent investment advice; have at least a 10 per cent deposit; and have a truly spare $100 per week available to afford to buy that investment property”.

Take action 

If you’re keen to build your own property portfolio, it’s a good idea to meet with your accountant at Highview to review your personal circumstances and strategise a plan of action. Additionally, Silvio Marinelli partner of the firm, runs free property seminars for clients throughout the year. If you would like to come along to our next session contact our office or email admin@highview.com.au.