Bushy Martin talks about what why your property investment strategy is crucial and the key things you should consider as part of that strategy.
On a recent live stream shared on Property Hub’s Get Invested podcast, KnowHow’s Bushy Martin joined Jef Miles and Joe Tucker from Aus Property Investors, one of Australia’s largest Facebook communities for property investors.
Together the trio delved into the importance of strategy, assessing your portfolio and investing in a professional team.
The importance of property investment strategy
An investment journey should always begin with determining an investor’s ‘freedom numbers’.
“It’s getting crystal clear on exactly how you want to live, and I’m getting down to what’s the perfect day, week, month look like. And this might change by the way, because once you’ve done your freedom numbers, then the important thing from there is to use this as a magnet in terms of getting excited about where you’re heading, but also to use it as a measuring stick because you can check in every 12 to 18 months and see how you progressing against it and if the numbers have changed,” Bushy said.
“So it all comes back to strategy. And once we understand what the timeline is and what the goalposts are, and then once we start to analyse properties, and most people are in the growth phase of their exercise, then we would normally suggest doing what we call a top-down macro, midcro, micro analysis of that area.
“Now a big chunk of the growth comes from the location, not from the specific property itself. So then we’re looking for leading indicators of future growth in that spot. And a lot of that information is service from council and government websites to look at the committed infrastructure that’s going to it and committed new industries that are going to happen in that location, so that we’re looking at a location in terms of what it’s going to look like in 10 to 15 years time, not what it looks like now.”
The importance of portfolio assessment
Investors should always assess whether a property is beneficial or dragging them down.
“You need to have a really good look and say, well, is this the property I actually want to hold for the next 15 years? Is it ticking boxes in terms of the ongoing growth opportunity? Because let’s be honest, given what’s happened with the property boom that happened post-COVID, there are a lot of areas around the country that aren’t likely to see much growth in the short to medium term because we’ve brought forward anywhere between three to six years worth of capital growth,” Bushy said.
“So unless a property in a location is experiencing new growth drivers in terms of new infrastructure, new industry, and strong and growing incomes, then a lot of properties are going to flatline for a considerable period of time. So I think a big part of the focus needs to be on having a really good look at the quality of your actual existing portfolio to make sure you’ve got top performers in there. And if you don’t have the capacity to take it much further, then that might be an opportunity to turn some of that stuff over and to put in something that’s going to perform better.”
The importance of an experty property investment team
Bushy explained a well resourced team will ensure investors get the best results without the full-time commitment.
“If you put full-time effort into this property game, you can absolutely do it. The challenge that people get into is when they put a part-time effort in and they expect a full-time result. That’s where you start to see people cutting corners and making mistakes and things like that. You put a full-time effort into something, you’ll get a full-time result. And this is where your team comes in handy,” he said.
“This is why you need to create yourself a solid team that is thinking about you. And those team members need to be communicating together as well because your solicitor or conveyancer, all they’re thinking about is how do we de-risk this situation. Your accountant is thinking, how do I reduce tax? Your mortgage broker is thinking, how can we increase income? And then the buyer’s agent is looking for something else. So it’s trying to get everyone together on the same page.
“Just because you haven’t done something doesn’t mean you can’t do it. You just need to surround yourself with people and make sure you’re rubbing shoulders with independent professionals in each of the key positions that can help you do it and teach you along the way.”
The importance of not having blind faith
While a good team can make or break an investor’s journey, they also shouldn’t hand over full control without understanding the decisions being made.
“Knowing enough to be able to manage your managers is the key. Definitely have the best player and each position as part of your team, but you must at least invest in them enough knowledge to be able to understand what they’re saying and what it might say. So you have to do that work,” Bushy said.
Listen to the full interview here.
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