Your step-by-step guide to achieving increased financial certainty through strategic property investment

Your step-by-step guide to achieving
increased �nancial certainty through
strategic property investment
SMART
The
to Building a Property Portfolio
Investor's Guide
By
www.propertywizards.com.au

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Contents
INTRODUCTION......................................................................................................................................3
STEP 1: CREATE YOUR WEALTH PLAN & INVESTMENT STRATEGY .........................................................6
Setting clear goals...............................................................................................................................6
Create your property investment wealth plan ...................................................................................7
STEP 2: FINANCIAL ASSESSMENT & FINDING THE RIGHT LOAN...........................................................13
What can you afford? .......................................................................................................................13
Selecting the right financial partners................................................................................................14
The importance of loan structure.....................................................................................................16
STEP 3: RESEARCH THE MARKET & CREATE A SHORTLIST ....................................................................17
Are location and property type really that important? ...................................................................17
Draw up your shortlist ......................................................................................................................22
STEP 4: RISK MINIMISATION & DUE DILIGENCE ...................................................................................24
Minimising risk..................................................................................................................................24
Due diligence.....................................................................................................................................26
Arriving at the right price..................................................................................................................28
STEP 5: GET YOUR PROPERTY PERFORMING & PROTECTED ................................................................29
Managing your property...................................................................................................................29
What does a good tenant look like? .................................................................................................31
How can you protect your property? ...............................................................................................31
STEP 6: ADD VALUE TO INCREASE RETURNS.........................................................................................32
What are the add-value options? .....................................................................................................32
Development.....................................................................................................................................34
Renovation or refurbishment ...........................................................................................................34
STEP 7: REVIEW AND REPEAT ...............................................................................................................36
The next investment .........................................................................................................................36
CASE STUDY:..........................................................................................................................................40
GETTING STARTED.................................................................................................................................42
Overcoming obstacles.......................................................................................................................42
What’s the secret?............................................................................................................................43
About Property Wizards........................................................................................................................44
GENERAL ADVICE WARNING
Any information or advice provided in this document is general in nature and does not take into account the
particular objectives, financial situation or needs of any person. The material and opinions of the company
should not be relied upon when requiring specific advice and, in that regard, readers need to seek further
professional help from an appropriately-qualified adviser or lawyer.

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INTRODUCTION
DOES THIS SOUND LIKE YOU?
• You are thinking about buying a property and are not sure where to start?
• You’ve already bought your first property but are unsure how to build on
this investment?
• You know that you need to start building passive income and wealth but
you don’t know which strategy is best?
IF IT DOES, THEN THIS BOOK CAN HELP YOU.

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A 2014 study by the University of
Melbourne and Towers Watson on
the adequacy of savings found:
“Only 53% of couples and
22% of single people are
on track to achieve a
comfortable level of
retirement income.”
The fact that three-quarters of a
million Australians own investment
properties shows that they know
that working and paying into
superannuation alone will not be
enough to fund their futures.
With life expectancy increasing too
(79.7 years for males and 84.2 for
females according to the Australian
Bureau of Statistics), this creates
more financial pressures.
So why do 70% of property
investors own only one property?
They are missing out on the massive
benefits of building a portfolio to
generate the capital growth that
creates future wealth, cash flow and
passive income.
Could it be that they don’t know
this – or that they just don’t know
the strategy to get started?

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YOU DON’T HAVE TO BE WEALTHY TO BUILD WEALTH…
The time to start thinking about this
is now – not in 10 or 20 years’ time.
A high-performing property
investment strategy does not
usually start when you are in your
late 50s or 60s; it’s a lot harder
then.
Remember: you don’t have to
be wealthy to build wealth!
In fact, you don’t even need to have
a huge salary. It’s never too early to
start buying good property, in the
right location, with a long-term
strategy of improving it, adding
value, and creating wealth.
Providing you get the right
investment advice, starting early
and building a portfolio of multiple
properties is far better than panic
buying a property when you realise
you don’t have enough money to
fund the future you’d hoped for.
You may be surprised how much
needs to be done before you
actually sign any paperwork. Good
planning, research and due
diligence is predominantly what
separates the savvy investor from
the novice.
We have broken it down into seven
actionable steps that you can start
taking now...

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STEP 1: CREATE YOUR WEALTH PLAN
& INVESTMENT STRATEGY
Property purchases are the biggest financial decisions that most people make
in their lives. As with all major commitments, success starts with planning and
detailing your strategy.
Setting clear goals
What do you want to achieve from
buying property? Write your goals
down and keep them accessible as
they will help to dictate your
investment strategy.
Do you aim to own a number of
properties to fund your retirement?
Do you want to improve cash flow
or pay for your children’s education
with property?
For many people reading this, the
primary long-term goal will be to
create the wealth that funds
the future that they want to
achieve –travelling more,
playing more rounds of golf,
or spending more time with
kids or grandchildren.
However, it’s important not
to cripple yourself financially
along the way. It’s best to
formulate short, mid-term,
and long-term financial
goals such as the following:
• SHORT TERM GOALS: pay off
credit cards, pay off short-
term loans, start saving X
amount every month
• MEDIUM-TERM GOALS:
increase equity on your home
or save for another deposit
• LONG-TERM GOALS: fund
your retirement

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Create your property investment wealth plan
Your wealth plan needs to be executable in the long term, while also allowing
you to live comfortably in the short and mid-term. You must enjoy the
journey!
You’ve already decided that property is the way to go but how exactly do you
go about it? And what are the main considerations?
KEY CONSIDERATIONS:
• Your business could fail or
you may lose your job –build
buffers into your calculations.
• Your plan needs to work in
any financial climate – don’t
base your plan on a ‘booming’
market as conditions change.
• A depressed market or
interest rates should NOT be
a reason not to get started.
• Is capital growth or rental
yield the most important
factor to achieve your goals?
• Are you looking to ‘set and
forget’ or add value to your
properties?
• What type of property will
you focus on – houses,
apartments, commercial?

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A strong investment portfolio can help you become ‘future proof’. It provides
the financial fall-backs you may need in the rough times, and huge capacity for
growth in the good times.
CAPITAL GROWTH: RENTAL YIELD:
Profit made on an investment
or purchase of an asset,
measured by the increase in
its market value over the
invested amount or cost price
A percentage derived from subtracting
annual expenses from the annual
rental income, dividing this result by
the total cost of the property, then
multiplying the result by 100.

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DO THE NUMBERS ADD UP?
Sooner or later you will have to look at the numbers. This is where some
people go misty-eyed.
When you retire, will you sell up and reinvest elsewhere? Do you aim to retire
on the rental income? Or do you plan a combination of these strategies?
If your plan is to retire on the income from your properties, exactly how many
properties you will need?
This is influenced by many factors and you will need to ask yourself the
following questions:
1. Will you still want to work
part-time before you stop
work altogether?
Increasingly, people want to free
up time to do what they want to
do, but don’t want to stop work
completely. Clearly this will
affect how much time you have
to make investments and how
much you need these
investments to make.
2. How much net income do you
need from your properties?
If your home is paid off and your
kids have moved away, you
generally need less, but
everybody has different
expectations. You may be aiming
for $50,000 a year or $150,000 a
year, which typically translates
to $1 to 3 million dollars in
property with no mortgage
(based on a net 5% return).

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3. What types of properties are
you planning for your
portfolio?
This also influences how many
properties you need. Typically
the higher growth properties
have a lower rental return so you
would need more of them to
produce the same income and
vice versa, or you may switch
from growth properties to yield
properties later once you have
had the grown and need the
income.
4. Will you want to continue to
develop and add value to
your properties?
Some retirees love to renovate
and develop properties that they
have accumulated. This can help
you make money well into your
retirement, meaning you need to
accumulate less than somebody
who just wants to put their feet
up or travel.
5. What are your personal
circumstances?
Whether you are single person,
married, how many children you
have or plan to have, and what
your life expectancy is will also
greatly affect how much you
need. Also if you are buying
through a self-managed
superannuation fund (SMSF) it
will affect your calculations.

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PROPERTY WIZARDS’ 7 TIPS FOR SUCCESS:
Your property investment plan is an effective way to
stay focused on your goals while filtering out
unnecessary distractions. Always ask how a
particular property is going to help you achieve your
goals…
• Take a small first step up.
The hardest part of climbing
the property ladder is getting
onto it in the first place. It
starts with a small step up –
don’t aim too high with your
first property. Start small and
work your way up from there.
• Quality over quantity. Your
property strategy should be
based on quality. Each deal
comes with a cost attached to
it in terms of time, effort, and
finances - so make sure that
it’s worth it. Get it right by
focusing on the right
properties in the right
locations and repeating it.
• Avoid ‘unbelievable’ deals. A
sensible long term property
strategy avoids the
temptation to make a quick
buck on the latest
unbelievable deal. Many
investors who have bought
properties off the plan or in
“hot spots” like mining towns
have been badly let down by
underperforming properties.
• Stick to the strategy. Many
property investors go about
their business in a random, ad
hoc way without a set
strategy, or deviate from the
strategy according to market
conditions. Once you set the
long-term property strategy,
and are happy with it, make
sure you stick to it as the
results will come over time,
irrespective of temporary
market fluctuations. Knowing
that you have a sound
strategy removes much of the
stress and helps you avoid
making hurried, emotional
decisions.
• Capital growth or rental
yield? Decide which is more
important to your investment
strategy – capital growth,
rental yield, or both? How will
your first investment fund the
next one and start producing
the asset base that leads to
real wealth?
• Consult a professional. A
professional buyer’s agent
should be able to help you

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formulate a property strategy
that suits you and is
achievable in the current
market.
• Consider your risk profile.
People have different ‘risk
profiles’. Some are
comfortable handling large
amounts of risk; others will
want to reduce risk to an
absolute minimum. This will
affect your investment
strategy.
• Become a property expert.
Most of you reading this will
not be property experts – but
you can become one. Learn
from colleagues or contacts in
the industry from your
network. Any insider
experience of property
investment is welcome. Read
up and research online
yourself too.
A FINAL TIP YOU MAY WANT TO CONSIDER
Many investors
like to have a
financial ‘buffer’
in place to help
them ride the
tough times in
property. This may mean
keeping aside a sum of ready
cash which may be stashed away in
an offset account, for unexpected
property events.
Income protection insurance is also
an extra layer of protection against
losing your income-earning
potential, should you lose your job
or become sick for instance.

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STEP 2: FINANCIAL ASSESSMENT &
FINDING THE RIGHT LOAN
You have your goals and property investment wealth plan outlined. Before you
start searching for properties, get a comprehensive financial assessment by a
trusted professional. This will give you an idea of what you can afford, how
much you will need to save, and how you can go about achieving your goals.
What can you afford?
There is little point designing an
investment strategy for twenty
years in the future when you can
afford it.
You need a strategy that is
actionable now – and to do that you
will need a full financial assessment
to detail where you are at with your
finances, what you can afford, and
how you can start building your
property portfolio as soon as
possible.
You need to arrive at a budget for
your first purchase before you start
looking at properties and wasting
time. If you don’t know your
present financial state, it is likely
that you will aim either too high or
too low when you start searching
for properties.

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This means you need to select the right financial partners to work with...
Selecting the right financial partners
Many people enter the property investment market by buying their own home,
but there are other options available.
You can’t do it alone – and you don’t need to. Successful investors surround
themselves with a good team of trusted professionals and build relationships
with them. Seek advice from property investment or finance professionals to
help you structure your finances optimally. A finance broker and accountant
would be the starting point.

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PROPERTY WIZARDS 7 KEY TIPS:
1. Consult your professionals
before you start looking.
Finance brokers, buyer’s agents
and accountants can all add
value to your strategy and
talking to them first is essential.
2. Get your buying structure right.
Discuss with your accountant
whether you should buy the
property in your own name; in
joint names with your partner;
through a trust; or through a
self-managed super fund.
3. Prepare the buying structure
before you start looking. It may
take time to prepare the
documents and you can’t make
an offer until they are ready or
you may end up paying double
transfer duty to change
afterwards.
4. Beware of finance brokers who
are not specialists in property
investment as they can make
simple financing errors. Any
errors with property can be
expensive.
5. Choose a loan that is tailored
for your circumstances that can
help you achieve the goals that
you have already defined; it
must be flexible enough to cater
for the long term as well as the
short term. You may want to
add properties to your portfolio.
6. The interest rate on your loan is
not the only consideration.
Offset accounts and the
flexibility to access property
equity is also important.
7. A small difference in quality of
advice can make a big
difference to your future wealth
so make a fully informed
decision!
A good finance broker will explain your options in full, and conduct a review of
your current financial circumstances. The broker will make recommendations
based on your financial goals, wealth plan, and property investment strategy
that you have already detailed.

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The importance of loan structure
If you choose your first property
wisely, it will increase in value
over time, and you will build
equity.
WHAT IS EQUITY?
Equity is the difference between
the value of the property and the
money still owing on your home
loan. If the property value is
$600,000 and the loan remaining is $350,000, the equity is $250,000.
For your longer term property investment strategy, you may need to release
the equity in your first property. This means finding a lender willing to
structure a loan to allow you to do that.
KEY CONSIDERATIONS:
• Should you opt for a Principal
and Interest (P&I) loan or
interest-only loan? Often
investors choose a P & I loan
for their own home and
interest only loan for
investments.
• Discuss how you can use an
offset account to reduce
interest with savings while
retaining the tax deductibility
after redrawing from funds
• Ask how you can minimise
the impact of tax on your
investment returns.
• Discuss whether you need a
line of credit (LOC) to use as
needed but ensure the extra
is worth it
• Discuss how you can reduce
non-deductible debt in your
home by paying off the loan
as quickly as possible, freeing
up equity that can fund the
purchase of future properties.
• Discuss how your advisor can
help you with planning to
finance your add-value or
development projects.

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STEP 3: RESEARCH THE MARKET &
CREATE A SHORTLIST
With the insight gathered from your investment plan, financial strategy and
loan research, start investigating the market to highlight locations and
property types that can help you achieve your property strategy goals; then
create a shortlist to work from.
DO IT YOURSELF OR HIRE A PROFESSIONAL?
In the end, the choice
is yours. You could put
in the work and do it
all yourself or you
could hire a buyer’s
agent to recommend
your strategy and find
your property.
Just as a selling agent
represents you when
selling, a buyer’s agent
will act in your
interests to help you achieve your goals.
A good buyers’ agent should take the time to fully understand your needs,
budget and expectations and explain the property investment strategies for
the current market. If your expectations are unrealistic, they should be able to
set you on the right path.
The buyer’s agent also takes away the daily grind of searching for properties as
they scour through databases and their network of contacts and unlisted sales
looking specifically for your property.
Two key areas to look for when selecting a buyer’s agent include expertise and
negotiation skills.
First up, the buyer’s agent should possess the expertise and knowledge
required to conduct specific research for your property investment strategy.
For example, lifestyle trends, development potential, re-zoning and major
infrastructure or planning projects in the property’s locality that may impact
on value over time.

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This kind of knowledge and market awareness that is only earned from years of
practice can prove to be invaluable.
Second, the buyers’ agent should be able to negotiate the best deal on your
behalf with the seller, including the contract and settlement terms, as well as
ensuring you don’t overpay for your property.
Remember, sales agents can offer value and information but they are legally
obliged to work in the sellers’ best interest and obtain the best deal for the
seller. A buyer’s agent works to get the best for you, and can help you get you
the kind of property you really want.
EDUCATE YOURSELF
While you will need professional advice, the research you do now will serve
you well for the future. You can start to educate yourself in property
investment by:
• Read property articles and books
• Enrol for paid courses by
property experts. If the course is
free, the presenter will either be
promoting their properties or
their services and would be
looking after their own
interests, not yours
• Studying accredited courses in
property and development
• Researching online using the
endless resources available and
particularly the independent
real estate associations such as
REIWA, who are not trying to
sell you their products
If you find all of this demands too
much of you on top of your busy
work or personal life, don’t let it
delay your property investment
plans. Worse still, don’t be tempted
to skip the groundwork and just go
out and buy because it could be the
wrong property, setting your plans
back, perhaps for years.
Rather spend the money on an
independent buyer’s agent to help
you get going and after your first
one or two properties you may be in
a position to put in the work and do
it yourself. You will also know a lot
more so it will become easier.
However much experience you
have, though, every purchase needs
all the groundwork and risk
minimisation.
A few words of warning about some
of the advice out there: those acting
on commissions may try to steer
you one way or another. Ensure that
the resources you are using are
independent and well researched,
and not just marketing tools.

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Are location and property type really that important?
Yes, location and property type are key, whatever your investment strategy.
This requires extensive research before you start looking for properties.
KEY CONSIDERATIONS:
• IF YOUR PLAN IS TO HOLD
PROPERTY FOR THE MEDIUM
TO LONG TERM: you need
areas that have several
growth drivers in place, such
as infrastructure
development, scarcity and
gentrification.
• IF YOU PLAN TO DEVELOP:
you either need properties
that are zoned correctly for
development, where there is
already a good market for
resales or tenanting of new
properties; or properties
proposed for rezoning that
you can hold on to, and which
can increase in value down
the line as the rezoning
approaches and demand
increases.
• IF YOU HAVE A YIELD
STRATEGY: you need the
right balance between land
value, building value, and
other factors that will deliver
the yield you need.
• YOUR FIRST PROPERTY IS
KEY: the success of your first
property will help determine
the timeframe for purchasing
future properties.
Often your strategy will be a combination of these factors. Your initial research
will help you narrow down where you can find the right, high performing
properties and what types of properties they are.

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PROPERTY WIZARD’S LOCATION TIPS:
• Research cities. Try to find
properties in cities with high
population growth, good
employment opportunities, and
high average wage growth as
these are good indicators of
property growth.
• Research suburbs. Find suburbs
that have good history or
potential or are due to be
revitalised. Those with public
transport links, lively retail and
café environments, reputable
schools and child care centres,
as well as parks and recreational
facilities, are always sought
after. Suburbs close to city CBDs
are also always in high demand
as are those with a long history
of strong capital growth – but
these tend to require higher
budgets.
• Research to street level. Some
streets within suburbs have
more potential than others.
There might be popular
restaurants along them, for
instance, while others may
border commercial areas. While
add value potential may be
higher, the suburb growth
usually applies in the long
whether it’s the best or worst
location.
• Consider demographics. Find
suburbs where owner-occupiers
want to live and where people
can afford to pay a premium to
live because they have higher
disposable incomes. Affluent
inner-city suburbs may be
beyond your budget, but how
about middle-ring suburbs of
the capital cities? These are
usually promising locations.
• Look for a range of growth
drivers. Where infrastructure
changes are underway and a
range of other growth drivers
are evident (not just one) these
are good indicators for potential
property growth. Speculation or
building a strategy on one
growth driver is high risk, but
acting on good data and drivers
that support growth over the
long term is wise.

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• Don’t focus on finding a
bargain. It can be a mistake to
spend too much time looking for
bargains as it is usually time-
consuming and the properties
may not be in the best location.
It’s better to focus on the right
property in the right location to
achieve your goals: be willing to
pay the market price, get in
quickly, and try to negotiate the
price down.
• If you are planning to refurbish,
renovate or redevelop, you may
have more options. Many
people don’t want to put the
work into fixing properties up,
so they may be available in great
locations at more reasonable
prices. But make sure that
structural issues don’t make a
costly renovation.
TIP: In the end the location you can buy in is highly dependent on your budget
and the available properties on the market for your strategy, so don’t define
your location too narrowly.

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Draw up your shortlist
Research may sound like a simple task but it will account for a large proportion
of the hours you put in to finding a property. Without it, costly mistakes are
made and you can end up with a property that performs only averagely or
worse – shaving thousands of dollars or more off your future investment
potential.
It’s not a case of looking at a few random properties; to be thorough you will
need to sift through hundreds of properties systematically.
There are thousands of properties on the market at any one time, and
narrowing them down into a workable list will take some patience and
practice.
You will need to consider not only budget and location, but property type too:
• House?
• Apartment?
• A low-maintenance property?
• A property to develop or renovate?

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IF YOU PLAN TO REDEVELOP:
Make sure that you research what type of property is in demand in a particular
location. There is no point buying land to build a multi-unit complex if there’s
no demand for this type of property in the area.
Run a feasibility study to identify what’s possible: number and types of
dwellings, expected costs and the profit you can expect to make from the
development.
If you have done your research – and found the type of property you need
within your budget and located in the right suburbs – then the shortlist
should come naturally.
You then have the ideal starting point for considering individual properties
more closely and selecting the one that best suits your needs.

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STEP 4: RISK MINIMISATION & DUE
DILIGENCE
Selecting the best property from your list is only the first stage of research in
buying a successful investment property. If your search strategy has been
thorough and you have taken steps to minimise risk, due diligence will ensure
that you buy the right property at the right price with comprehensive market
analysis.
Minimising risk
Savvy property investors have done
their homework on every property
they buy to minimise the investment
risk.
Risk is increased by not having done
the research to make a fully informed
decision. Investing in property on ‘gut
instinct’ or in the mistaken belief that
you are qualified to make big business
decisions because of your success
elsewhere could land you in trouble.
While uninformed investment is the
greatest risk, the good news is that if
you have followed the advice in Steps
1, 2, and 3, then you will be well
informed and ready to go.
If you are hiring a buyer’s agent their
job is to do the risk minimisation, the
due diligence, the price assessment and the negotiation on your behalf. But if
you are doing it yourself you need to go through all the steps to protect
yourself.
There are some tried and trusted strategies for minimising property
investment risk and increasing the chances of success.

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PROPERTY WIZARD’S RISK MINIMISATION TIPS:
• Buy a property that appeals to owner occupiers.
Not because you want to sell it, but because other
people buying in the area help increase demand
and raise prices.
• The right property in the right location at a well
negotiated price is usually less risky than hunting
for bargains and hot deals.
• Focus on properties in areas with a range of growth drivers including a
history of strong capital growth, good demographics, and good
infrastructure (or where infrastructure changes are underway).
• If you are keen to add value yourself, look for properties where you can
be proactive. Refurbish or renovate to add value to your properties, to
attract a better quality of tenant and help you add your own capital
growth.
• Try to add value through subdivision or development. This can increase
your equity over and above market growth, provided you do thorough due
diligence.
• For your first property especially, seek professional help. Enlist the
services of a professional buyer’s agent who can help you choose correctly
and minimise your risks of making a costly mistake.
• Never skip or cut corners with property inspections. Make sure you always
know what you’re buying by enlisting the right professional help to assess
your properties beforehand.

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Due diligence
Whatever type of property you plan to buy, you will need it inspected to
ensure that there are no hidden problems.
Mistakes here can cost thousands or even tens of thousands of dollars to
rectify so this is a crucial step not to miss.
Of course, the inspections you need will depend on your investment strategy.
At the very least you need to check:
• Is the dwelling structurally sound?
• Has there been any termite activity in the house or surrounding
property?
• Are there signs of any hidden and costly repairs needed
that don’t add much value, e.g. rewiring?
• Are there any easements on the land?
A comprehensive due diligence will require
more enquiries to minimise your risks and
it’s usually best to have professional help to
know what to check for your specific property.

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If you’re going to demolish
immediately after buying
then you will need to
make at least the
following checks (and
maybe others,
depending on the
property):
• Are there any restrictions or caveats on
developing the land as you intend? Encumbrances on the
site such as a drainage easement could reduce the land size available for
development and therefore the number of dwellings that can be built on
the site. This can severely reduce the profitability of a site, if it was
purchased on the basis of building a certain number of homes to achieve
a profit.
• What is the zoning of the property and are there any specific planning
policies that affect this?
• What is the development potential of the site? A surveyor should be on
your project team to confirm that you can achieve the number of lots
you are aiming for and that the boundaries are in the correct position.
Additional or reduced land area can change the nature and potential of a
development dramatically.
• Where are the services located? If the sewer line runs through the
property check the building restrictions near the sewer and make certain
it still suits your development.

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Arriving at the right price
Once you are convinced that the property is right for you, how do you ensure
you arrive at the right price with the owner?
Remember that you are looking for
the right property at a good price –
not hunting for bargains. Quite
simply, good properties in the right
locations are the best way to
minimise risk and ensure high
returns: this is because your
property will be in continual strong
demand by owner-occupiers, who
push up property values, and
tenants, who pay rent and help you
pay your mortgage.
If you are using a buyer’s agent,
they should be analysing recent
similar sales to work out what the
property is worth and then plan a
purchase strategy to give you the
best chance of a successful buy at
the best possible price.
If you are doing it yourself, by now
you should be more skilled at
research – you can check market
analysis research yourself to arrive
at what the property is worth or get
professional assistance. You will
hopefully also have been to many
home opens of similar properties
and followed up the sales prices so
that you can estimate what the
property is likely to sell for.
Then negotiate with the agent or
owner until you arrive at a price
that you are happy with.
The skill is in not being afraid to
walk away if the price is not right.
Take the emotion out of the
negotiation and never be swayed to
buy by ‘gut instinct’ or because you
feel a special attachment to the
property. If it does not make
investment sense, walk away.

29
STEP 5: GET YOUR PROPERTY
PERFORMING & PROTECTED
You’ve got the property you wanted. What next? It’s important to consolidate
by choosing the right property manager to help you achieve the maximum
returns. Take some time to ensure your investment is performing before
moving to the next step.
Managing your property
It may be tempting, if you’ve done
much of the research yourself and
got a ‘feel’ for property investment,
to think that you can manage your
new property yourself; or to hire
the cheapest property manager in
town.
However, property management is
a specialist area that requires
professional know-how to be
successful – not just the ability to
handle a rent contract and to help
you comply with regulations.
The performance of your first
property is one of the keys to your
future wealth. A good property
manager will help you maximize
the value of your property and
increase your cash flow to pay off
your mortgage quicker, increasing
your ability to make future
investments.
It pays to select the right one the
first time so that they are able to
effectively manage multiple
properties for you in the future.

30
KEY CONSIDERATIONS:
• Does the property manager
have extensive experience of
the local property rental
market?
• Can they provide real
testimonials and checkable
references?
• Do they understand your
short, mid, and long-term
investment goals?
• Do they have the resources
to provide a personalised
service rather than just
collect rent?
• Is your property manager
overworked and liable to
make errors or overlook
issues?
• Will they provide regular rent
reviews?
• Are they able to help you
forecast changes in the
market?
• Will they help you protect
your property and meet your
investment goals?
• Are they able to advise you
how to add value to your
property to maximise rental
yields?
• What is their plan to help
you optimise rent?
• Your buyer’s agent should be
able to refer you to a good
property manager who has
achieved results for their
other clients
With property managers you usually get what you pay for. The fees are tax
deductible so don’t be tempted to skimp in this area.
Your own time is best
spent researching the
next investment rather
than trying to manage
the day-to-day tasks
involved with running a
rental property.

31
What does a good tenant look like?
Finding good tenants paying the market rate will get your investment strategy
off to a flying start. A good property manager will help but you will need to
make the final decision about who moves in to your property.
PROPERTY WIZARD’S TIPS FOR FINDING GOOD TENANTS:
• Most property owners want long-term tenants
who are professional couples with no pets.
Finding them is difficult as they are often
owner occupiers.
• Focus on finding tenants who will not damage
your property and pay the rent on time. Make
sure their references from previous rental
properties are checked.
• A good property manager should vet the tenants well for you so choose
your property manager before you choose your tenants.
• Keeping your property well maintained helps you minimise vacancy time.
Tenants are less likely to move if the place is well looked after.
How can you protect your property?
A good property manager is the first step in protecting your property.
However, you should also add an additional layer of protection through
property insurance. This protects rental income and covers tenant damage and
your property manager or buyer’s agent may be able to point you towards an
insurance company specialising in investment property.

32
STEP 6: ADD VALUE TO INCREASE
RETURNS
Many investors set and forget the properties they purchase, and purely focus
on steady cash flow and rental yields. This can be a mistake, as adding value to
your property in the right areas can accelerate capital growth, increase rental
yields and help you progress along the path to wealth.
What are the add-value options?
Adding value to your property should
not be an afterthought; it should be an
integral part of your plan when you set
out your investment strategy, start
researching, and buy your property
using the first four steps described in
this book.
TIMING AND AFFORDABILITY
It can be a lucrative strategy to buy,
develop and hold on to properties,
because while you are earning rental
income you can also benefit from the
depreciation schedules and increased
capital on your balance sheet for
further borrowings and development in
other projects or investment options.
Further down the track you can always
sell off or borrow against a property if
you require cash to fund other projects or your lifestyle.
It’s important to understand what you can afford to do and plan for it. Some
buyers may purchase a property and have the financial capacity to redevelop it
immediately; others may max out their borrowings to buy the property and
work with a savings plan to fund the development down the track in, say, six
months to a year, or even several years.
A good idea is to look at investment properties that either have the zoning
currently for immediate redevelopment if you plan to develop straight away; if
you need two or three years to raise the capital to redevelop, buy where the
zonings set to change in the future. That way you can get a better deal.

33
DEVELOP AND SUB-DIVIDE OR RENOVATE?
Once you have purchased the right property, you have two main choices for
adding value (again these should be considered before you buy):
1. SUB-DIVIDE AND/OR DEVELOP: If your property is large enough and
strategically located you may be able to subdivide it to create two or
more dwellings. Alternatively, you can obtain approval for the
development and then revalue the property with subdivision or
development approved.
2. RENOVATE AND/OR REFURBISH: Make sure that the cost of the project
will be offset by increased rental income and/or growth in value and
calculate the expected payback period (it may take some time).
Increasing rental value and capital growth has the immediate and long-term
benefits of generating more cash flow and building up equity to refinance
your loan and purchase another property: this is when you start to leverage
your investments and accelerate wealth creation.
The key is to ensure that you are not just beautifying a property for the sake of
it: the returns must outweigh the outlay.
If you are using a buyer’s agent who specialises in add-value properties, they
should have the knowledge about what kind of add-value property you should
aim for to meet your strategy and goals and what your best add value choices
will be with that property. If they know their stuff they should be able to sift
through the many development properties that are inferior (the majority) and
identify the best options.

34
Development
Adding extra homes to your property and renting them out separately can
increase rental yield for property owners, helping you to pay off the mortgage
quicker and develop valuable equity.
During the research phase (Step 3) you will already have formed a strategy
based on the type of development in demand in the location in which you have
bought.
PROPERTY WIZARD’S TIPS FOR DEVELOPING PROPERTY:
• Use the development feasibility study you ran while
researching your investment and carry out the
planned work according to its findings: but first
assess whether anything has changed – the market,
finances, regulations, or your objectives?
• Make sure that you have structured your finances
properly to minimise interest repayments.
• Don’t be fooled by false economies. Doing the work yourself may save
costs initially but often ends up costing more. Demolishing a property and
only working on it on weekends can severely delay completion. It can also
be very expensive to take trailer loads of rubble to the local tip. Hiring
professionals will reduce project completion times and get tenants moving
in faster, as well as helping eliminate surprise costs.
• If you don’t have the time or experience, consult with a buyer’s agent
with local zoning and development expertise. Property development can
accelerate your wealth creation substantially, but it can set you back if you
make the wrong decision, such as buy the wrong property, not check the
right due diligence or pay too much, eating up your profits.

35
Renovation or refurbishment
Renovation can be a very smart way to quickly add value to your property.
PROPERTY WIZARD’S TIPS FOR RENOVATING PROPERTY:
• If your intention was to renovate then in your
research you would have already looked for
properties with renovation potential. That’s why the
research step is key to every aspect of property
investment.
• Sometimes you can add value to a property with
some simple refurbishments (like painting) or
relatively cheap purchases (a new carpet).
• Don’t make the mistake of over-spending on frills such as the latest
appliances if the rental yield does not increase enough to justify it.
• Be careful to match the property renovation to the area. Don’t
overcapitalise in a cheaper area or under-spec in a more expensive area.
Granite vanity tops and high-end kitchen appliances may be a waste of
money for properties in areas below median value, but almost certainly
required in more well-heeled suburbs.

36
STEP 7: REVIEW AND REPEAT
Your plans may need periodic adjustments due to changes in your
circumstances. Take some time to sit down and review your objectives. With a
renewed plan and a fresh financial assessment, you are ready to repeat the
success of your first investment and progress towards your goals.
The next investment
With your first property investment safely under your belt and rapidly helping
you to improve your financial position, it is time to start thinking about
expanding your portfolio.
This is what separates the serious, knowledgeable investor, with long-terms
wealth goals, from the novice investor who just dips into the market because
they have been told they should.

37
Following are a few Questions and Answers to consider when you are
pondering your next move.
“IS IT EVER RIGHT TO DO NOTHING?”
Warren Buffett did say “The trick is, when there is nothing to do – do nothing.”
It’s true that you should not be tempted to act when the time is not right, but
there is nearly always something to be doing with property investment
strategy. More research, more market analysis, more hunting, more shortlist
additions.
You don’t always have to be buying and you certainly don’t want to buy
impetuously; but be sure to keep your eyes peeled and your nose to the
ground in the locations you have identified and in the property market in
general.
Usually, when the market is down and nobody else has the confidence to buy,
that is the best time to buy. There are more properties available at better
prices and with less competition. Don’t be afraid to go against the market
trend and don’t try to pick the top or bottom of the market as nobody, not
even the wisest professional, can do that.
The best time to buy property is almost always “now”, using the right strategy
and plan.

38
“SHOULD I CHANGE MY PLAN?”
One of the characteristics that distinguishes the strategic property investor
from the one-off investor is that they regularly review the performance of their
investment portfolio.
Many one-off investors have no idea if their property is performing optimally
or not.
Hoping for the best is not the stuff of serious investors. You need to review
strategy and performance at least annually and then adjust to ensure you are
hitting expectations.
This is not to be confused with changing your long-term objectives: they will
remain the same, but how you get there may need tweaking according to your
circumstances and the performance of your properties.
Ask yourself the following types of questions:
• Am I getting the maximum rental yield from this property?
• Can I add more value?
• If this property was on the market today would I buy it again?
• Is this property contributing positively to my wealth plan?
• Would I be better off without this property?
• Why is this property performing better than that one?
• What would happen if interest rates rise by 1%
• What’s my Loan to Value ratio?
• Should I be looking to add another property to my portfolio?
• What would that take?
• Would I benefit from refinancing?

39
Remember!
If the long-term plan is right, then stick to it - don’t cave in to short-term
concerns.
AND
The cost of re-evaluating finances is small compared to the potential value
that can be gained by adding the right property at the right time to your
portfolio.
“HOW CAN I BECOME A SAVVIER INVESTOR?”
It’s a good idea to surround yourself with professional advisors but at the same
time it’s important to educate yourself and learn more about how to make
wise investments.
Even to be able to spot the best advisors you need a sense of good decision-
making when it comes to property: spruikers can lead even experienced
business professionals to make disastrous property investment decisions.
You will never regret investing hundreds of hours of your time into researching
properties and developing your own knowledge of the market by studying and
reading up on strategy from thought leaders in the field, and checking market
updates from reliable sources.
At the same time trusted professionals can save you much of the legwork and
help prevent the costly mistakes often made while you are learning: a trusted
buyer’s agent is a great idea for instance, as well as a finance broker and
property manager.

40
CASE STUDY:
MEET DAVID
My wife and I knew from our twenties that we wanted to retire early and
would only be able to achieve this goal if we were to take charge of the
process ourselves and find a way to create the wealth required to achieve our
goal.
THE HARD YARDS: PLANNING AND RESEARCH
It wasn’t until our early 30s that we actually started getting quite serious with
the array of wealth creation concepts around. It was at this stage that we set
an incentive and goal of retiring by the time we turned 45.
In order to achieve this goal we had to make a few sacrifices for the next few
years. We chose to live moderately, minimizing the purchase of unnecessary
items, expensive dinners and those coffees that seem to add up to a lot of
money. We were financially conscious about where our money went rather
than frittering it away and we bought what was needed and minimized the
waste.
We threw ourselves into this mission and read a lot about different wealth
creation strategies. Through this process we found that property was
predominantly the strategy used by people who had successfully created a lot
of wealth, enough to be able to do as they choose. This is the freedom that we
desired; to do as we choose, retire early and live a luxurious life.
We decided to capitalize on the opportunities in the Perth market. When we
began looking for properties, we were unsure what and where to buy. It was
important for us to buy a property in an area that was likely to give us good
capital growth to help us along the way with our goal of retiring by the age of

41
45. I picked up a magazine and saw an ad for Property Wizards and three
other like companies. I called them all. The first never called me back and the
second one I didn’t care for.
Property Wizards followed right up and called back the next day to make sure
that we had everything we needed, they were very comforting and reassuring.
Their professionalism came through in every interaction.
BUYING THE PROPERTY
In the heated market it did take us a little longer to find a home under the
parameters we wanted but Property Wizards communicated right up-front all
of these details. We had clear expectations and we were happy with this as it
was important that we bought the right property, at the right price, to ensure
that it would be a wealth creating asset in the years to come.
Property Wizards moulded their search around our criteria of a buy-and-hold
in a high growth area and bought us a fabulous property in a great area at just
the right time.
We bought in an area that is armed with an array of equity building economic
drivers which almost 100% guaranteed the future growth of a property bought
in this area.
We bought this property minutes away from beautiful beaches, a foreshore
which was being upgraded with lots of new shops, cafes and restaurants; the
main shopping centre was also being given a complete makeover.
CREATING WEALTH
We had the property valued a year after we purchased it and that value had
gone up over $100,000 in a year. That is like getting a third really good annual
salary without actually doing any extra work!
In just over 10 years my wife and I have achieved our primary goal – I retired at
43 and my wife retired at 42. We travel every year, including trips to London,
Paris and Spain as well as taking smaller trips around Australia, but more than
anything we have lots of time on our hands and no real obligations. We are
able to live our lives as planned, we are able to take time to enjoy ourselves
and do as we please. Our portfolio of soon to be 10 properties as well as
shares and cash allow us to live totally off the income they generate.

42
GETTING STARTED
There is always a reason not to start.
Serious investors work to overcome
barriers – not actively raise them. It’s
relatively simple to become one of the
few who approach property investment
strategically, increasing the chances of
developing wealth and a more certain
financial future.
Overcoming obstacles
Most of the common obstacles to
getting started are in the mind. That
means that they can be overcome
simply by a little education and a
change of thinking.
Below are some typical examples:
FEAR
This is generally fear of the unknown or of making a mistake. It can be
conquered by learning more about property investment – as you are
doing by reading this eBook. This helps you take measures to minimise
the risks involved, increase the chances of success, and become a
confident investor.
LACK OF FUNDS
You may need less than you imagine to get started. Okay, you need an
income to qualify and pay off loans, but this doesn’t have to be a top
executive salary. Careful planning, good advice and good financial
practice which may include a savings plan helps you achieve a lot with a
little.
BAD TIMING
This is one of the lamest excuses we hear. There is always something
else happening but until you place wealth creation high on your list of
priorities then property investment will always be shoved aside by a
more pressing need.

43
IT’S TOO COMPLICATED
Thinking that property investment is easy is a mistake, but so is holding
off because it is too complicated. The fact that it is not easy helps you: it
means that most people make mistakes. By learning a professional
investment strategy or using an experienced buyer’s agent you have a
clear advantage in the market.
PEER PRESSURE
Family, friends or colleagues may try to talk you out of property
investment. However, if you have done your research and aligned
yourself with the right advisors then you have the tools you need to
explain to them. If they won’t listen, don’t hold back your wealth plans
because of others who are standing still.

44
What’s the secret?
The secret to successful property
investment is that there is no
secret! There is only strategy,
research and relationships.
Setting yourself apart from the
rest is simple: most people don’t
do the things outlined in this
eBook. They have no strategy.
They may read a few articles and
jump head first into property, or
believe that one property is
enough to fund their retirement.
They will buy on impulse,
emotion, or in the wrong location
without researching well enough; or they will fail to act and leave it too late to
build the equity that leads to wealth creation.
Treat property investment like your own small business: focus on developing
and implementing a well-considered strategy; forming relationships with the
right advisors; and educating yourself about the system so that you also
become an expert in the field.
The best investors use professionals to help them get there. They find a
winning formula and stick to it. Rather than having to keep ripping the plan
up and starting again, they make sure they get it right, and follow through
with it again and again.
Start working on your property investment strategy...
Call Property Wizards on 08 9381 7450

45
Testimonials
“We are very grateful to David, Trevor, Hayley and the team
at Property Wizards. From our first meeting to discuss
investment property purchase through to purchase and
assistance with finding an excellent property manager, the
whole process was seamless. Whilst we were reasonably
educated and informed about this new venture, we also
realised that we were not sufficiently and appropriately informed. This is where
the Property Wizards team stepped in and where we realised how
inexperienced we really were! We can’t recommend them highly enough – even
though we utilised their services for an investment property, we believe anyone
seeking their own house would do well to ask their help.”
Geoff & Monique F.
Mt Claremont, WA
“I had been thinking about building an investment
portfolio for some time, but my FIFO job meant that the
time I had available to scour the market was limited.
Properties were moving too quickly for me to find the
right one, so when I found Property Wizards, my prayers
were answered.
Property Wizards were able to conduct a thorough search for the property that
suited my plans, which were to subdivide and develop straight away. In the end
they were able to find an off-market property, enabling them to negotiate
directly with the Seller to get the best deal, and as an added bonus, the
property can now be developed into three new street-front homes!
Without Property Wizards’ assistance, I would not have been able to find such a
promising development site in this fast moving market. I have no hesitation in
recommending their services.
Ryan H.
Clarkson, WA

46
About Property Wizards
Here at Property Wizards, we believe everyone has the
right to the knowledge to help you accumulate wealth,
no matter your background, education or income.
We can help you unlock the potential of the real estate
market for your family through savvy property
selection, negotiation on price and conditions, and
development expertise.
Regardless of market conditions, our research, local
knowledge, and access to silent sales means we find
the ‘hidden gems’ that can outperform the market in
capital growth and rental returns for long term wealth
creation. Importantly, we’re able to provide property investors
and homebuyers with the same level of representation that property sellers
have benefited from for years.
Your property portfolio is your path to financial freedom and the lifestyle
you’ve been longing for.
Property Wizards takes away the stress of buying a property and saves you
money at the same time. We can show you how, or you can sit back and let us
do all the hard work for you. It really depends on the amount of time you’d like
to put in.
If you have an interest in building your wealth through property, then call us
on (08) 9381-7450 to book a complimentary appointment with one of our
Property Wealth Strategists. Or request a FREE Starter Pack at
www.propertywizards.com.au/free-starter-pack/
Disclaimer: The information herein is not intended as investment, financial, legal, taxation, building,
development or any other advice and must not be relied upon as such. You should obtain independent
professional advice and make further independent enquiries before making financial, legal, taxation, building,
development or investment decisions. Past performance is not an indicator of future performance. Property
Wizards does not predict or warrant capital growth, rental or investment returns or profits and expressly
disclaims any responsibility for any direct or indirect harm, loss, claims, costs, or expenses, from of relying on
any capital growth, rental, development estimates or investment returns based on information given or
omitted by Property Wizards or any of its associates, directors or employees.

Whether you are a first-time investor, a seasoned pro or a home buyer,
please contact us for information or a free strategy session to help you
build a property portfolio for financial independence.
Tel (08) 9381-7450
Fax (08) 9381-7490
info@propertywizards.com.au
Subscribe for hot property tips and special offers
only for our members.
International Tel +618 9381-7450
Fax +618 9381-7490
Licensed Real Estate Agent, Licensee T/C 50550
Property Wizards Pty Ltd atf The Streets Ahead Unit Trust ABN 61 772 441 085
Property Wealth Strategists
• Licensed Property Buyer’s Agents
• Property Developments
• Property Selling Agents
• Renovations
• Subdivisions
• Licensed Real Estate Agents
• Member REIWA
•
•
•
•
•
121 Churchill Avenue, Subiaco Perth WA 6008
P O Box 256 Subiaco, WA 6904 Australia
•

Your step-by-step guide to achieving increased financial certainty through strategic property investment

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