The Property Investment Ecosystem

How we do it

Your blueprint for navigating the property market.

At Property Navigation, we help our clients build balanced wealth generating property portfolios, utilising various strategies and risk profiles depending on an investor’s ambitions and goals. With that being said, our overarching strategy is to take a sustainable long-term approach to property investing, or a 'buy and hold' approach as you may have heard it described.

One of the most important outcomes of this strategy is that investors – and we believe that every property buyer is an investor – become less reactive to dips and are more focused on the long-term upward trend of the property markets – this is what creates true wealth.

To help our clients purchase quality properties, we have developed our own framework called the 'Property Investment Ecosystem'. This easy-to-understand framework has been developed to demonstrate the principles that underpin our everyday decision-making when buying wealth-building properties for our clients.

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PROPERTY INVESTING ECOSYSTEM

The Property Investment Ecosystem

The ‘Property Investment Ecosystem’ is based around three Investment Criteria which form our property performance selection criteria, and three Wealth Drivers, which are crucial to creating and sustaining wealth.

Property Navigation_Investment Ecosystem-min

Find out more about our Property Investment Ecosystem and the Investment Criteria and Wealth Drivers that influence our property buying process.

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Our property performance selection criteria

Investment Criteria

These principles are our first priority, as they directly impact the effectiveness of the Wealth Drivers that create and sustain wealth.

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Timing Property Cycles

Identification of the state/city/major regional centre

Australia is not just one property market. Each state, capital city, region and significant regional centre is its own property market, and growth phases within each of these markets occur at different times. When buying an investment property, it is essential to select a market that is in an early-to-mid growth phase to achieve above-average capital growth. Property Navigation identifies the property markets that provide the best opportunity for growth and/or cash flow in South East Queensland.

Location selection

Identifying the best suburbs

Location does 70% of the heavy lifting when selecting investment-grade properties that will perform well into the future. Therefore, we invest a huge amount of time and research into collecting data on suburbs that present the best value and growth opportunities.

Asset selection

The final step for maximising success

A dwelling produces cash flow through its rental capacity, meaning the quality of the dwelling is also of significant importance. Property Navigation predominately buys pre-loved homes, placing emphasis on the appreciating component of the deal – the land, as the physical dwelling depreciates in value over time. Attaining both capital growth and cash flow is achievable if the right asset is selected.

We conduct high-level due diligence on each property presented to our clients to assess how it fits into their long-term plan and goals related to subsequent property purchases.

How you create and sustain wealth

Wealth Drivers

At the asset level, we must investigate future cash flow, any value-add potential, and forecast capital appreciation to determine the investment grading of each property.

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Capital Growth

This is when a property increases in value, and where real wealth is created. As the value of a property increases, equity can be extracted and used to grow an investor's portfolio. The loan-to-value ratio improves as each property value increases, which allows investors to leverage off the bank's money instead of their own.

Capital Growth creates equity. Equity accelerates an investor’s ability to accumulate properties, being used on its own or combined with savings – See below.

Serviceability (income) + deposit = Property 1
Serviceability (income) + deposit + equity = Property 2, 3, 4+

Cash flow

Cash flow liquidates debt, especially in the early stage of a loan’s life. As cash flows increase (rent goes up and/or mortgage repayments go down), excess cash flow can reduce more debt. A passive income stream generated from the rental property can also be combined with other main income streams to increase serviceability levels to assist in building out a property portfolio.

Over a 15 – 20+ year period, excess cash flows increase to a level that can replace or subsidize an investors income creating what’s known as a passive income stream. It’s not impossible, it just takes time.

Value add potential

Adding value to a property is key to maximising efficiency throughout the investment process. Increasing the amount of equity harvested from a property is essential when reinvesting to purchase subsequent properties.

Performing minor face-lifts and renovations and even adding granny flats are straightforward ways to increase property value. Adding value increases equity and allows higher rents to be charged, ultimately increasing rental yields to pay loans down more quickly. The manufacture of equity/growth and cash flow can be utilised at varying degrees when needed and is an excellent risk mitigation strategy.

Want to find out how we can help you find the best property?

Book your free 20-minute Discovery Call, where we'll chat about all things property and show you how a buyer's agent can help you navigate the property market. With no obligation, you have nothing to lose and everything to gain!

The Property Investment Ecosystem

How we do it

Your blueprint for navigating the property market.

PROPERTY INVESTING ECOSYSTEM

The Property Investment Ecosystem

Our property performance selection criteria

Investment Criteria

Timing Property Cycles

Location selection

Asset selection

How you create and sustain wealth

Wealth Drivers

Capital Growth

Cash flow

Value add potential

Want to find out how we can help you find the best property?

Contact us

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