Investing in property can be a great financial decision. However, it’s never as simple as buy, hold, and sell. You need to come up with a clear strategy if you intend on investing in the property market. Who knows? You might eventually decide to retire early. You and your spouse might end up separating. Your debt might cause you unnecessary stress.
The point is: no one knows exactly what the future holds. The best you can do to protect yourself from the unforeseeable future is to create a backup plan for your backup plan.
Why Isn’t One Backup Plan Enough?
We spoke with CEO and founder of CIA Tax, Dr Steven Enticott to understand how to better plan. Enticott explains the need to create multiple backup plans if you intend to get into the property market. Aside from personal decisions that you may have to make in the future, you can’t always control what happens around you.
Steven Enticott explains how sometimes life can be overwhelming, but if you are prepared, you won’t have to lose any sleep. If you want to be prepared, you must think about the what-ifs and plan for them.
What Are Your Backup Plans?
You should be prepared to sell some of your assets someday. Dr Enticott says you don’t have to hold on to every asset, especially when your circumstances have changed. If you own several properties, you can sell one of them. It is important to look at capital gains tax considerations and choose the one that avoids the most tax. Putting aside sentimental value, one excellent asset to consider is your family home. Since your main residence is free from capital gains tax, you can always opt to sell it.
Another strategy that you might want to consider is rentvesting. Rentvesting empowers you to own an investment property and maintain your lifestyle through renting. To put it simply, rentvesting means you can own a home, but you live somewhere else. You can rent out your family home and use the fee you receive to cover your own rental payments.
Downsizing into retirement is another option open to Australians looking to reduce their debt. This option has been more popular in recent times with the government making it easier for downsizers, with the ability to deposit into your superannuation account.
Who Do You Go to for Help?
Dr Enticott says that it’s always best to start with yourself. Think about possible outcomes, consult family members before seeking help from property investors, accountants, and financial planners who can support their insights with numerical data. To fully understand your position and your options you will need to seek out multiple opinions to be able to recognize all possible outcomes that you might not have considered.
Want to assess your options and plan for the future? Go to https://dollarswithsense.com.au/contact-us/ , leave your details and one of our qualified consultants be in touch with you.