Growing a portfolio
How do you develop a successful portfolio of properties? It’s a commonly asked question among budding investors
AS WITH any long-term wealth creation strategy, building a property portfolio takes a lot of time and careful consideration.
The number one piece of advice I would give to anyone looking to grow a portfolio is to develop a good strategy before purchasing. Your main focus should be on buying safe, solid assets that will go up in value if you hold onto them for 10, 20, or 30 years.
It’s also important to be realistic when developing an investment plan. Don’t aim to buy five to 10 properties tomorrow and become a millionaire overnight. Concentrate on taking simple steps and buying one property at a time.
Everyone is different and will prefer a different investment strategy depending on their knowledge, attitude to risk and level of involvement. With this in mind, below are my top tips for developing a successful portfolio.
1. Set goals. The first step to developing an impressive portfolio is to set some objectives. Organise your finances and work out exactly how much money you have to work with and exactly what you want to achieve through your portfolio.
2. Do your research. While it can be tempting to buy into the first property you see, if you spend more time researching potential investments properly, you will gain more financially down the track.
3. Diversify your portfolio. Remember to be selective about the properties you choose to invest in. A great portfolio will have a mix of older properties that can be renovated to add immediate value and new, off-the-plan properties to get growth with a small deposit.
4. Consult professional advice. The value of property experts like professional valuers and buyers agents should not be underestimated when investing in a property.
5. Look for properties within the median price. You want properties that are going to be easy to rent because as a property investor, that’s what pays your mortgage.