In Australia’s mining industry, the Fly-In-Fly-Out (FIFO) working rosters can provide you with the opportunity to substantially increase your earning capacity whilst also allowing for personal and professional growth.
If you are currently working in the FIFO mining industry, you may have asked yourself how you can make the most of this opportunity and what life may look like when you eventually transition out of the sector.
One approach that can assist you with better establishing your financial position and supporting your transition out of FIFO lifestyle is through investing in property. Property investing can allow you to build wealth and generate a passive income over time that can eventually supplement a portion or all of your salary.
How to use property investment as an exit strategy for FIFO work
Using property investment as your FIFO exit strategy can provide you with numerous benefits, including the following:
- One of the most significant advantages of property investing is that some properties can be negatively geared in the first few years. This can potentially provide you with tax breaks whilst you’re on a higher income bracket.
- Depending on your specific financial situation, the quality of your investment asset(s) and the current market, you may generate a passive income from the very beginning of your investment journey. Alternatively, your passive income may flow in later years when you’re looking to leave the FIFO role.
- Good investment properties may produce ‘silent income,’ better known as ‘capital growth.’ This can allow you to leverage off your current properties to buy more whilst you’re on the higher income. Capital growth also means you can enjoy a higher return on investment, should you choose to sell your property.
- You will have a strategy to help use your money effectively to reach a goal, instead of accumulating debt on non-income producing assets, or spending money on items you do not need.
Where to start your property investment journey
We encourage anyone looking to invest in real estate to start by working out a property investment strategy. This should be tailored to your individual circumstances and goals and involves conducting a full financial analysis, risk questionnaire and review of any current property holdings.
This is a crucial first step to ensure you are buying the right type of property, at a price that will align with your strategy and help you achieve your financial objectives.
Professional buyer’s agents can assist with the entire acquisition process – from researching potential investment properties, right through to due diligence, negotiation and completion.
Your investment decisions should not only consider strategies to maximise your potential returns, but also strategies to minimise the on-going risks associated with property investing.
Diversification is a key component of risk mitigation. This is where you need to avoid putting all your eggs in one basket. With property investing, this can be as simple as purchasing properties in different suburbs or asset classes such as commercial or industrial.
Another means of achieving diversification is to invest in a property investment fund (sometimes referred to as ‘property syndicates’). These can provide you with access to high-quality assets which might otherwise be out of your financial reach, by allowing you to pool funds with other investors.
Such funds are usually established and managed by real estate investment experts, and can typically include multiple asset classes (for example: retail, medical, industrial, residential development etc.).
Property investment can present you with some appealing opportunities. However, in order to achieve your investment goals, establishing a clearly defined strategy, doing your due diligence, and exercising some financial self-discipline is essential.
Making smart financial decisions today can help you if you’re looking for alternative income streams or want to supplement your income when you leave a FIFO lifestyle down the track. It’s important to note that financial independence through property investment takes time, and the best time to start is now.