Hello and welcome to another edition of Client for Life.
‘The Importance of Being Earnest’ inspires this week’s edition.
People ask me what underpins the success of the Solid Mentoring program. The answer is simple. We treat every investment as a separate entity. We never take funds from an investment property to fund lifestyle.
We encourage all our clients to open a separate bank account for each property. Rental income, withholding tax refunds and top up amounts to meet outgoings should all be directed into this account.
By being Earnest with your property investment portfolio and running each property as its own entity, the property will fund itself with the rhythmic influx of funds, and the mortgage will be met each month. Surplus funds are great as a reserve, and can fund capital upgrades, which add to our depreciation schedule.
Years ago when I ran my recruiting business, I interviewed several staff who were retrenched from a computer company. When I enquired where they felt the business had failed, all three candidates told me that the owner had purchased a boat and was taking money from the business to fund the boat’s restoration.
I often think of that story when I meet with investors who complain that their property portfolio is weighing them down. I can promise you that in almost all cases the reason is that they use their tax refund for an overseas holiday, new pool fence or some other entirely unrelated expenditure. It isn’t the property sending them broke; it is the lifestyle and lack of structure around investing.
Please take time to register for the Members Lounge. All investors will be able to view monthly updates to construction progress of each property, particularly your own, and provide you with information on other investments that may be of interest to you.
If you are having difficulty registering for the Members Lounge; please telephone Sarah Jane on (03) 9690 2666 for assistance.
Enjoy this edition of Client for Life.