© PPA Articles — www.propertyplanning.com.au.
Reproduced with permission.
The final step in this process, before you embark on your property-purchasing phase, is to develop your Property Plan. It doesn’t matter whether you are just starting out in the property market or only plan to purchase one more property in your life, or at any stage in between.
You want to map out your ‘ideal’ Property Plan for your lifetime and lifestyle, at least until retirement. Let’s reach for the stars. We can always review and adjust the plan as needed each year, but by setting goals and a path forward, you are already going to have greater control over your ability to achieve your ideal lifestyle. Isn’t that what Property Planning is really all about?
Rather than just making one property purchase at a time – when the whim takes you, because a friend has been in your ear or when the circumstances happen to be convenient – having a Property Plan enables you to work through a scheduled program of investment decisions based on an ideal outcome and timeframe. It is the difference between making things happen and letting things happen to you. Being pro-active or re-active! The lack of a plan leads to haphazard and random decisions. Having a Property Plan gives you a pathway to follow, so that your purchasing decisions are coordinated, prioritised and strategically determined.
Now that we have mapped out an ideal world, unfortunately, it is highly likely that we will need to make some compromises. With that in mind, we should start considering what some of those trade-offs could be. This way, if compromises need to be made, you will have time to consider them in advance and be in more control of your decision making. Planning is often about creating contingencies for future events so we’re not caught by surprise and respond reactively or inappropriately when they occur. We know that our ‘plan B’ is the next best option. Most of us need to make compromises on our ideal family home, but the greatest area of concern you need to plan for is the possibility of cash flow issues.
Largely, cash flow stresses are due to not planning ahead. This is why it is important that we uncover some of the possible challenges that may arise, so we can ensure they are factored into your Property Plan. Lenders assess loan applications based on a snapshot of your current income, employment, liabilities and personal circumstances. It is often too late to readjust once you are locked into a circumstance where cash flow issues arise – resulting in increased stress and sleepless nights at the most inopportune times. This is one example of why a Strategic Financing Plan is fundamentally intertwined to a Property Plan.
Property investing is complex if done poorly and can cost you hundreds of thousands of dollars. It is important to educate yourself to increase your chances of success. There are many challenges that can affect your plan. This is also why your Property Plan is not a one-off document. Life is fluid and circumstances constantly change throughout your life. As they say, change is the only certainty in life so we may as well plan for it where possible, and at minimum mentally prepare ourselves that it will come – often when we least expect it! We need to continuously review and evolve our Property Plan to keep pace with our changing circumstances and priorities.
It might have surprised you to discover that most Australians will earn somewhere between $4 million and $5 million during their working life, however, most retire poor. Given this fact, it is clear that using your income wisely throughout your lifetime is vital to a successful transition to a more flexible stage of life and then into full retirement. This can only be achieved by:
- saving more than you spend
- purchasing wisely
- strategic financing solutions
- minimising your mistakes.
Having a Property Plan is logical – it just makes sense. It reminds me of a quote from one of the world’s greatest engineers that has always stuck with me, although I have no idea who made it. The sentiment of the quote was that when involved with creating some of the world’s most amazing and complex buildings, the construction would inevitably hit a roadblock and finding a solution seemed impossible. What was discovered is that a solution would always be found despite the perceived degree of difficulty. But the great insight was that the solution, no matter how seemingly impossible prior, seemed obvious and simple when looking back in hindsight. This is often the case when we are Property Planning (as with life in general) as we untangle the complexity to find the most suitable pathway forward.
If the idea of a Property Plan sounds logical and resonates with you, then it’s time to sit down and discuss your personal path to achieving your desired lifestyle.
It is never too late to start a Property Plan. Development of your Property Plan signifies the start of the journey from where you are right now to where you want to be. You can now be clear on your next property decision, your strategic approach to finance, and your long term goals. You will have a sense of clarity that you have never had before and move forward with purpose and perhaps most importantly, the ability to spend more of your mental energy on other areas of your life, such as enjoying your personal pursuits. This could mean spending more time with family and friends and mastering your past times and profession, with the peace of mind that you are putting your best foot forward with your Property Plan.
Click here to make a time to discuss your property planning or personalised strategic financing needs or call our head office on (03) 9819 4088.