First-Time Property Investors and Family Planning – A Smart Approach to Wealth-Building (Ep. 285)

Episode Highlights

• _{1.00 – Mike kicks off the episode, introducing the focus on first-time property investors and family planning.}
• _{1.46 – Sheree’s question: Helping her primary-school-aged son get onto the property ladder. Mike and Cate dive into the complexities of early family financial planning.}
• _{3.25 – What is a defined benefit super fund? Cate explains how this unique setup impacts Sheree’s investment strategy.}
• _{7.51 – Is it too early to plan property investments for children in primary school?}
• _{10.21 – Structuring a property purchase for children: Trusts, transfers, and protection strategies parents need to consider.}
• _{13.02 – The importance of holding costs and cash flow: What to keep in mind when planning a gift property for children.}
• _{16.19 – Cate and Mike recap Sheree’s options}
• _{17.16 – Chloe’s question: A first-time investor’s journey. Cate and Mike explore her detailed groundwork and the importance of strategy.}
• _{19.55 – Should your first investment be a growth asset?}
• _{22.59 – The pitfalls of seeking the “perfect property.”}
• _{27.09 – National vs. local buyer’s agents: What investors should know before choosing expertise.}
• _{31.24 – Gold Nuggets}

Show notes – First-time property investors and family planning

Today the Trio roll up their sleeves and tackle first-time property investors and family planning. A special callout to our lovely listeners, “Sheree” and “Chloe” (not their real names), for prompting this insightful episode.

Question 1 

My son is in primary school. I would look to retire around 60 and be in a healthy financial position so I’ve got options. My super is currently just over $800k (defined benefits). Should I also consider an investment property for my son? If so, where and what?

• Why do property investors often consider helping their children get onto the property ladder? Cate and Mike discuss Sheree’s situation, exploring how family planning and property investment strategies can align for long-term wealth creation.
• Cate delves into the unique challenges property investors face when structuring purchases to benefit their children. From trusts to tax considerations, she outlines how careful planning can make the difference between a thoughtful gift and a future financial burden.
• Sheree’s defined benefit super fund provides an interesting foundation for her financial planning, giving her some unique advantages as a property investor. Cate explains how this influences her ability to make smart, strategic decisions for both her retirement and her son’s future.

Question 2

I’m a would be first time property investor. My question is about planning.
I have worked out maximum borrowing, current household surplus and have an idea of appropriate maximum negative cash flow (with some buffers). We want to buy a growth asset and to work with a ‘local expert’ buyers agent.   
These variables should be enough to narrow down where to invest… but I can’t work out how to do it. ‘Local expert’ buyers agents are often not connected to businesses that look across all of Australia.  

• Chloe’s meticulous preparation and focus on securing a growth asset lead Cate and Mike to discuss why this is often the best first step for building a property portfolio.
• The team unpacks key considerations for property investors, such as understanding holding costs, managing cash flow, and defining long-term financial goals. They emphasize how a clear strategy can help property investors avoid common pitfalls, like analysis paralysis or chasing the elusive “perfect property.”
• Cate shares her thoughts on local vs. national buyer’s agents, highlighting why property investors benefit from working with experts who deeply understand their chosen market. Boots on the ground can often provide the insights property investors need to make confident decisions.

Key insights from the episode for property investors:

• For parents: Structuring property investments for children requires careful planning to avoid unexpected challenges.
• For first-time investors: A growth-focused asset can be an ideal foundation for a property portfolio.
• Strategic planning is key: Defining your goals as a property investor ensures each decision contributes to your bigger picture.
• Local expertise matters: Partnering with a local buyer’s agent can give property investors the edge in a competitive market.

Gold Nuggets:

• Mike Mortlock’s gold nugget: “The more work you do on your strategy, the fewer options—and more clarity—you’ll have for making the right decision.”
• Cate Bakos’s gold nugget: “When you’re helping your kids, always ask: Is it a gift or a burden?”