Top tips for growing your property portfolio
Breaking into the property market can be the most difficult step to growing a property portfolio. However, after purchasing your first property it tends to become easier to purchase your second, third and fourth properties. The key to finding success when building your property portfolio is to be smart with your investment plan and dedicated to your goals.
Here are some simple steps for growing your portfolio.
Get educated
Being educated can be the difference between owning one property and owning twenty properties. Maintaining knowledge of market trends is integral to knowing when and where to invest. The CPS property wheel is a great starting point for investors to understand market trends and to invest wisely.
Create an investment strategy
Do your research, formulate an investment strategy and stick to it.
When it comes to your strategy, it’s important to stick to what you’re good at. If you’re great at buying fixer-uppers, renovating and then reselling at a higher value, stick to it. This type of strategy however is not for everyone.
It’s important not to formulate a strategy purely based on potential cash flow or capital gain. If you’re not competent and confident in the field of investment, you probably won’t succeed. Sticking to the one investment strategy that you’re passionate about will help you become an expert in your field, and will ultimately help you build a large and thriving property portfolio.
Invest in different areas
When owning multiple properties, investing in different suburbs is important for minimising the risk of investment loss. Putting all your eggs in one basket can mean that when experiencing a loss in a poor performing area, you lose on your other properties too. Owning properties in different suburbs means that when one property is performing poorly, the loss can most likely be covered by a property performing well in another suburb.
Re-invest untapped equity
If you already own and are making repayments on a home loan, you may have idle equity. Re-investing your untapped equity as soon as possible is a great way to build your property portfolio and ultimately maximise capital growth. Speak to your financial advisor to find out your buying power and the amount of equity you have.
Save in order to buy
Making money from your investment is not all about rental yields and capital gains. A large and often overlooked piece of the property game puzzle is ensuring you save as much as you can in order to invest sooner. This includes budgeting your income, maximising your deductions at tax time and shopping around to ensure you get the best home loan for your investment. Doing all the calculations is important for minimising investment risk and ultimately growing a sturdy property portfolio. Most importantly, speaking to a financial advisor can help you set up a budget strategy and investment plan.
If you would like some advice on building your own property portfolio, talk to us today.
