Like many an article I write, I find I’m led to this topic because I’m cheesed off. I like to think it’s because I’m passionate about what I do – maybe I’m getting old and grumpy. Either way here’s my gripe.

When buying property, the first step is to prioritise your goals. The second step is to find the right property (the physical structure) for those goals. The third step is ensuring the right entity is used (financial structure) to buy it and hold or sell it.

The steps are in priority order. Too often people say “The structure is in place, we just need some property.” The success of the investment and the likelihood of it meeting or exceeding your goals is down to the property and not the entity. No matter how good the financial structure, if the property is a dud, the investment will be a dud.

I’ve had people approach me who’ve spent thousands of dollars on a structure using a whole string of professionals and then had someone, who isn’t a property professional, select the property.

That is a recipe for disaster.

A whole industry has sprung up around HOW you buy something rather than WHAT you buy. The majority of sellers of property are likely to have the best of intentions, but maybe a percentage will just see it as a way to sell more stuff. “Well you don’t have enough money to buy it in your name – have I got a solution for you…”

Too often I see headings like “This is an ideal self-managed super fund investment”, with no reference to the property’s likely performance. Maybe it’s a great long-term investment but if your timeframe is shorter, then it’s not ‘ideal’. If it is negatively geared and you want cash flow, it’s not ‘ideal’.

Right now I’m involved with a local business property project, Cubbyhole, which can generate income of more than 10%. The potential for growth appears strong and it has a low price. Across the broad range of people and entities who have invested in it, many different structures have been used, including personal names, companies, different trusts and SMSFs. They all got the priority order right and the fundamentals of the property will increase their chances of success. They got the right structure for their structure.