You build a property portfolio by investing strategically in properties. And if you go about it the right way, your investments can give you exponential returns.
Our guide will take you through the process of building a property portfolio and help you devise your long-term goal. So, let’s get started.
What Is A Property Portfolio?
A property portfolio is a collection of real estate assets that an individual, group or a company owns.
These assets can include anything from residential homes and buy-to-lets to houses in multiple occupations, commercial buildings, serviced accommodation, or even industrial sites.
The main goal of a portfolio is to generate income and build long-term wealth. A property portfolio can generate you income in multiple ways. It can be rental income, capital gains, or even land leases.
Building a property portfolio isn’t akin to investing through Real Estate Investment Trust (REITs). This also means you can choose the ownership structure that best suits your goal.
Many investors diversify their portfolio to minimise risks and maximise returns. They spread their investments across different property types and locations. Done right, a property portfolio can give you years upon years of return.
How To Build A Property Portfolio In Australia?
There isn’t one master way to build a property portfolio in Australia. But here are a few things you can do to ensure you build your portfolio in the right manner:
Set Goals
The first step for building a portfolio is to set goals. What kind of portfolio do you want to build? What’s your purpose? Is it rental income or capital growth? You also need to think about your short, medium, and long term goals.
Research the Market
Look at the suburbs with strong rental demand and growth potential. Speak to local real estate agents about tenant profiles and lease trends. Also check transport, schools, and amenities.
The next step is to compare prices as well as rental yields. Ensure you check out sites like Domain and realestate. Alternatively, you can join investor groups in different online forums and social platforms to do your research.
Talk to other landlords as well to get a first hand experience of what it is like. And finally, don’t forget to factor in costs such as insurance, tax, and stamp duty.
Start Small
Don’t dive head first into a risky property. Start with a low-risk one. Buy one first. And then expand gradually. Make sure your first property is in good condition though.
Buy With Strategy
When you are searching for a property to invest in, consider auctions, private sales, and try to find properties that are priced below market value. Also, read the fine print, and avoid overstretching your finances.
Manage your money
Make sure rent covers your loan and expenses. It is also a good idea to plan for repairs and vacancy periods.
Choose and keep good tenants
Screen tenants carefully. Respond quickly to repairs. Maintain a professional relationship to encourage long-term leases.
Grow steadily
Only buy more when your existing properties perform well. Monitor the market and the economy before adding to your portfolio. The quality of our renters determine your rental income, which in turn makes your investment loan process easier.
Final Words
A property portfolio takes clear goals, smart buying decisions, and steady management. You can start small, learn from each purchase, and then grow at a pace you can handle. Do keep your eye on the market trends, look after your tenants, and protect your cash flow.
We can help you purchase your first investment property and begin your portfolio journey by matching you with the right lenders for your circumstances. Call us at 1300 889 743 or fill out our free enquiry form for more information.