Investing made easy: Working backwards

There are no hard and fast rules when it comes to moving from small-time property investor to property tycoon extraordinaire. But what is required is a solid plan that will get you into more serious property investment - particularly if you want to build a robust property empire rather than a house of cards.

The key to moving from small to medium or even big-time property investment is all about working backwards: establishing your "end game", or objective, before you start. Then it is a matter of planning how you address the fundamental issues of building equity and maintaining loan serviceability in order to reach the finish line in one piece.

Craig Moffat, ANZ general manager of specialist distribution says: "It's taking a step back and saying: in a few years time, or depending on my age, I really want to have a certain amount of income set aside that I can live off and not have to realise any of the capital investment."

Investors need to establish just how many properties "unencumbered" with debt they need to achieve that income goal and how each step in their investment process might build on the two magical investment cornerstones of equity and cash flow.