Property Investment – Get your ducks in order first

The pitfalls of starting a property investment portfolio when all your other ducks aren’t in order.

Whether you are a beginner or a seasoned investor, there are still some major pitfalls you need to consider before leaping into investment property.

It is true that any opportunity to increase your personal wealth will present some dangers – however the potential benefits should always be weighed against these dangers.

When it comes to property investment you need to manage the risks and reduce your chances of running into major problems by making smart choices.

You should do everything you can to prevent or avoid the risk altogether, and there are things you can do to mitigate the effects and soften the blow.

Get your ducks in order first!

Here are 3 measures you can take to protect yourself and to grow the wealth you desire.


  • Getting the right insurance

Stuff happens! Bad tenants, pest infestation, natural disasters. Again, this comes down to having the right insurance so that any unexpected costs and repairs do not come out of your pocket.

You should also maintain personal protection insurances, including income protection insurance, to cover you in the event that you may not be able to work.


  • Protect your personal income

Setting up your portfolio so that your properties don’t require you to contribute cash each week to keep them running is key here. Maintaining a positively-geared portfolio will ensure your properties won’t become a burden if you lose your regular source of income. If your properties are negatively geared then you can reap tax benefits, but be sure to understand how much cash you need to contribute each week to pick up the shortfall.  This could come from a cash buffer below.


  • Cash will always be king

By keeping a sufficient cash buffer in an offset account to reduce payable interest, you will also be able to deal with unanticipated expenses and repairs. Putting your money to work will be a guarantee that your properties will pay for themselves and not eat into your day-to-day finances.

The property market can be volatile however with planning and a clear structure, you can ensure that your ducks will be quacking in a healthier financial pond.




7Wealth Pty Ltd ABN 44 609 210 246, is an Authorised Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 Australian Financial Services Licence 232706 and Australian Credit Licence 232706
This blog contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/ or a percentage of either the premium you pay or the value of your investment. Please contact us if you want more information.
December 13, 2017