As we head into the new financial year, many taxpayers will be preparing tax returns and reliving the previous 12 months through the lens of credit card and bank statements.

Without doubt, a number will realise they’ve, once again, failed to make investment plans to maximise their financial position both now and into the future.

I was having a discussion with an accountant recently and the most common questions asked by his clients around this time of year are:

1.     How can you help me pay less tax?

2.     How do I increase my wealth?

As so happens, real estate is an excellent vehicle for helping achieve both these outcomes, but it doesn’t work if you fail to take action.

So, if come next EOFY you’d like to be congratulating yourself on having purchased property to boost your tax return and grow your wealth, then read on.

Why people delay investing

There are several reasons why our plans to invest get waylaid.

First up – property investment can be a complex subject for those who don’t work in the industry fulltime. Coming to grips with the processes and terminology of investing can be overwhelming and stifling. Many will bail out at this first phase because they feel well out of their depth.

Those who stick with it will inevitably begin to do internet searches on the subject to try and become an expert in real estate investment. This is akin to solving the problem of a toothache by googling, ‘How to be a dentist’. It’s an impractical, and sometimes dangerous, approach.

Finally, if they do battle on, most hit a stage of analysis paralysis. There is so much information now available online that you quickly become lost in the weeds of data and will be unsure which way to turn. Worse still, most free info is unfiltered and will be produced by those with a self-interest.

The loop of indecision will continue to spin out of control unless you take practical steps to stop the cycle and get on the investment path.

How to change your mindset

There’s no better time than the start of a new financial year to simply stop and think about money matters.

This can be difficult. We seem to lead increasingly busy lives. In fact, when caught in the feedback loop of analysis paralysis, we fool ourselves into thinking we’re extra busy but using our time productively.

I recommend you make a date in the diary to simply sit down and consider your desires for the future. Go into long-term thinking mode. What do you want to achieve? More wealth, less tax and better cash flow? Retirement options at a reasonable age?

Reset your motivations for just a moment.

The next step is even simpler – pick up the phone and call a trusted property investment advisor.

Property investing is like running a business, and the savviest business owners rely on advisors to help them make plans and reach decisions.

The professional process

This call to an advisor is imperative because they will lay out all the stages you must to follow to break the cycle and build a portfolio.

We use a 14-step process with our clients to leads them toward the optimal investment – and the first seven of those steps have nothing to do with specific property options. This initial part of the program is entirely oriented toward getting you prepared for investing.

By working through our Investor Strategy process with a professional advisor, you hit all the key points to move you beyond procrastination and toward real estate ownership.

1.     Set your goals including the time frame for achieving them, and your tolerance for risk.

2.     Assess your position. Set out your assets and liabilities, income and expenses to ensure there’s resources available for investment.

3.     Investments structures. An advisor will look at the best structures for achieving your goals, with options including trusts, companies and partnerships.

4.     Borrowing capacity assessment where we help determine how much a financier will lend you. We are looking at a preapproval to remove doubt about loan amounts so you can invest with confidence.

5.     Set your budgetary comfort level. Now you know how much you can afford to invest, are you comfortable with the outlay? Just because you qualify for $800,000 doesn’t mean you have to purchase at that figure. Your advisor guides you through the process of determining your comfort level when borrowing.

6.     Check on location and property type. Again – now you know your borrowing tolerance, it’s time to consider where you’re comfortable investing and what type of property suits you best.

7.     Implement the strategy. By following all parts of the process in order, you reach a place where you’re ready to invest. This final step is choosing to now implement the strategy and start building the portfolio with the help of your expert Property Investment Advisor.

So, stop living in the world of ‘if only I’d acted’ and begin reaping the long–term rewards of investing… but please don’t skip the steps.

Article by Richard Crabb, Managing Director of the Aspire Advisor Network