Securing your financial future: 5 key considerations for property investors

Our recent webinar for doctors considering setting up a property portfolio, highlighted key questions participants wanted answers to. 

1. How do I start building a property portfolio? 

A solid strategy and thorough planning are key to your success. This should be informed by considering the fundamental aspects of what you want to achieve. These include: your overall financial objective, your time frame to reach this position, available funds or assets you can borrow against, and the level of risk you feel comfortable with.

Before starting an investment portfolio, it’s wise to speak with a finance specialist who can help assess your situation and establish your financial goals. Someone who understands medical professionals' unique circumstances will have the expertise to help you structure your finances optimally and present your case to lenders effectively.

2. How do I choose where to invest? 

The secret to finding the right property in the right market and paying the right price is to do your research. Put aside whether you might personally like to live in an area, or specific property, and focus on the data. 

Take into account infrastructure that makes an area attractive to renters, such as proximity to shops and cafes, public transport, local schools, healthcare and other services. Future development plans for the area are also a useful indicator of whether somewhere is likely to become more desirable to live in over the longer term.

Once you have a specific property in mind, Avant offers members access to digital property reports^# produced by CoreLogic. These reports provide market information including estimated sale value, indicative rental yield and suburb growth trends.

If this all sounds like a lot of work that you don’t have time for, consider engaging a buyer’s agent who can do it for you.

3. Are multiple cheaper properties better than one bigger house? 

Diversification principles apply to property portfolios just as they do to other investment portfolios such as shares. Investing in several properties in different markets can help spread your risk of a downturn in different regions.

The other consideration for geographic diversification is land tax. Each state has a different threshold for when land tax starts being applied. By owning properties in different states, you are less likely to hit the tax threshold for that individual state, and so may pay less land tax across your whole portfolio.

Additionally, having several smaller investment properties gives you the option of being able to sell just one if you need to release cash. Don't forget to consider capital gains tax implications of selling an investment property.

4. Do I need a lawyer in each state I'm investing in? 

While different states have different property laws and conveyancing rules, you're likely to find it easier if you can deal with one legal representative who has access to property law experts in the other states or territories. 

This centralised approach provides continuity and efficiency, a particularly important consideration when you are managing the demands of a busy medical career. 

Avant Law has property experts in each state, and the ACT, so you only need to deal with one lawyer regardless of where you invest in Australia.

5. How can I finance my property portfolio efficiently? 

Doctors are generally considered favourably by lenders, meaning if you are interested in property investment, you may find accessing funds is relatively easy.

Firstly, you may be eligible to borrow up to 95% for a residential property, without having to pay the lenders mortgage insurance (LMI) that loans of over 80% usually incur.* And, if you already own a home in which you’ve built up substantial equity, you may even be able to negotiate a ‘bucket’ of finance to draw on if purchasing several properties over a short period of time.

Our loan calculator^ is an easy way to see what repayments you need to be able to service, and how long it will take you to pay off your loan.