How to Build a Property Portfolio
Be Interested in Investing
A multi-property portfolio requires a strong passion for investing and a goal for financial freedom in order for your investments to do well.
Introducing a routine of staying up to date with market conditions on a daily or weekly basis to grow your investing knowledge. Commit to learning how to evaluate trends, attend seminars/conferences and speak to relevant sources like investors and industry experts with the same goals as your own.
Start Smart
Your first property is always the most important, making sure you pick the right property first will then lead to being able to purchase that second and third sooner rather then later.
The first property is the key to gaining capital in order to expand the portfolio. Finding the right purchase in an area with consistent growth will open up the option of using equity on your first house to then purchase your second and so on.
Know why your on the Journey
It is imperative that you know why your are building your portfolio in the first place. Knowing why will bring you clarity and keep you on the path to reaching you end goal. I personally believe that making making small goals or checkpoints in the process will make the experience all the more enjoyable.
Portfolios should be tailored around your current income and future financial goals. once you know what your aiming for you can take the required steps to achieve them.
Selecting the Area
Choose your area of investment carefully. Growth suburbs are what investors look for, when looking at suburbs be sure to look at the growth from the previous 10 years and if the area has at least doubled in that time.
Other things to look for in a potential investment opportunity:
- Public transport options.
- close proximity to schools and shopping centers.
- Areas with planned infrastructure.
- properties with opportunities to renovate and expand.
Aim for the Best
When selecting a property, the two most important things to look at are, is the property going resell after your purchase? and will there be a risk of rental vacancy?
Other things to consider are:
- Purchasing below the median price giving your property room to grow.
- at least 9% capital growth or 8% rental yield to cover property expenses.
- when purchasing the property aim for an average of less then 30 days on the market.
Diversify to Lower the Risk
in order to spread the risk and performance outcomes, set up a long-term focused, diversified portfolio with properties in both city and regional areas. You should also look at buying properties in a variety of states or territories, to help alleviate land tax burdens.
Build a Support Team
Smart investors seek out for those who are experts in the field. Surround yourself with relevant professionals such as an experienced financial advisor, an accountant the specializes in property portfolios and a trusted mortgage broker. Develop relationships with Buyers Agents around the country to find the best deals possible.
Practice Patience
Building a multi-million dollar portfolio is not done in a day, but staying on task and working for each goal you put in front of yourself will make the process memorable and rewarding.
remain dedicated to investing for the long-term, keep consistent with your wealth-building strategies and Most importantly, stay educated.
Jakob Keane – Buyers Agent
