'A Prescription for Property Success' webinar recap article

Like many Australians, doctors love property – and with good reason. Not only is property a tangible asset that doctors can control and pass on to the next generation, but it is an investment that offers tax benefits to high-income earners. Furthermore, it provides opportunities to diversify across residential, commercial or industrial markets. And importantly, doctors can leverage the increase in value in one property to fund their next, helping them to grow a property portfolio.

The strength of Australia’s property market is undisputed. Research indicates that over the last 100 years, residential property has delivered total annual returns (rent plus capital growth) averaging 10.9% per annum^[1]. For comparison, Australian shares have achieved marginally higher average returns over the same timeframe – 11.2% annually, but there is a key difference. As Rasti Vaibhav notes, “Property is a lot less volatile.”

Mr Vaibhav believes there are good reasons to expect healthy property price growth in the future. He points to several factors, including population growth, supply constraints, Australia’s low unemployment rate and high levels of disposable income, plus a nationwide infrastructure boom backed by record levels of government spending.

Nonetheless, he cautions, “Not all properties are the same. There are over 15,000 suburbs in Australia. Some will flourish, and some will struggle.”

Pinpointing properties that can be richly rewarding as an investment calls for a 2-pronged approach. First, investors need to consider the fundamentals, says Mr Vaibhav. Look at the supply of properties, the jobs available in an area and appealing factors such as local schools. Then dig a little deeper to look at ‘days on the market’ – how long properties are taking to sell, the vacancy rate, and the percentage of renters in the area.

A strategy, due diligence, plus expert lending advice

Mr Vaibhav notes that not all investors will enjoy success with property.  One in two will sell their investment property within the first five years. The vast majority (72%) will own just one property, and less than 1% of investors will own 5-plus properties.

One factor that Mr Vaibhav believes sets successful investors apart is having a watertight plan.  He adds that this was where most other investors fail.

“You need to have a plan before you start,” he says. “Most people only focus on the one property they are buying. They don’t have a strategy.”

What does a successful property strategy look like? Mr Vaibhav refers to what he calls the ‘RARE model – based on a process of:

• Review your goals
• Aim for the target that’s right for you
• Raise the necessary funding, for example, through leverage, and work towards your
• End goals.

In fact, Mr Vaibhav recommends starting with your end goals so that you can be sure your property strategy will take you where you want to go.

Making the most of leverage

Along with a plan, it makes sense for medical professionals to partner with a property finance expert.

This is where Avant Finance can help.

As Avant Finance only works with doctors, dentists, and veterinarians, we have in-depth knowledge of their income patterns, and other factors impacting them when looking to invest. This experience matters regardless of whether you are seeking a loan for a first home or to grow an existing property portfolio.

Mr Vaibhav explains it this way, “You need a lender who understands loans for doctors. You need to know which properties to buy that will satisfy the lender.”

Avant Finance gives medical professionals access to over 30 lenders and 400-plus loan products. Better still, we have partnered with CoreLogic to provide complimentary residential property reports that contain data used by banks to determine a property’s estimated sale value, suburb growth trends, indicative rental yield plus comparable properties on the market and school catchment zones^{^}.

We also offer specialist legal services through Avant Law to support doctors with a range of legal expertise. This includes conveyancing and establishing your assets (including property) in a way that can benefit the people who matter to you for years to come.

Click here to view the full property webinar featuring Rasti Vaibhav.

Ready to achieve your investment property goals? Call Avant Finance on 1300 99 22 08, or request a free consultation with one of our medical finance specialists.