Are you looking to achieve financial security, have choices in retirement, or leave a legacy for your loved ones?
If so, property investment can be a great way to achieve your goals. But where do you start? And how do you avoid making costly mistakes?
In this blog post, we will discuss the 7 steps you need to take to build a successful property portfolio. We will also share some tips from our experienced property investment advisors.
1. Understand Your Goals
The first step to building a successful property portfolio is to understand your goals. What do you want to achieve with your investment? Do you want to generate passive income? Build wealth for retirement? Or leave a legacy for your children?
Once you know where you are at and your goals, you can start to develop a strategy to achieve them.
For example, if you want to generate passive income, you will need to choose properties that will generate a steady stream of rental income. If you want to build wealth for retirement, you may want to consider investing in properties that are likely to appreciate in value over time by investing in properties that are located in scarce and very desirable areas. And if you want to leave a legacy for your children, you will want to consider building a property investment portfolio.
Keep in mind that there is no one size fits all strategy; such is best discussed with a Property Strategist. Keeping in mind that a strategy needs to be customised and fit the individual application. The best application may well be a hybrid combining income and capital growth.
2. Do Your Research
Once you know your goals, you need to do your research. This includes researching different investment properties, different investment strategies, and the property market in general.
It is important to get professional advice from an experienced property strategist. They can help you understand the risks and rewards of property investment and develop a strategy that is right for you. They may even be able to guide you to the right area, suburb, or even may be able to propose a customised property investment for you.
There are a lot of resources available to help you do your research. You can read books and articles, attend seminars, and talk to other property investors.
It is also important to stay up-to-date on the latest trends in the property market. This will help you make informed decisions about your investments. It is crucial to have a team of specialists supporting you.
3. Choose the Right Properties
Once you have done your research, you are ready to start choosing properties. There are a number of factors to consider when choosing properties, such as location, condition, rental potential, and potential for capital growth.
It is important to choose properties that are located in areas that are in high demand. You also want to make sure that the properties are in excellent condition and that they have the potential to generate a good rental income.
You may also want to consider investing in properties that have the potential for capital growth. This means that the value of the property is going to increase over time. Then there are of course many hybrids possible.
4. Get Financing
Once you have chosen the properties you want to invest in, you need to arrange for the financing. There are a few different ways to finance property investment, such as through a bank loan, a private lender, or even taking advantage of a government grant.
The best way to finance your investment will depend on your individual circumstances, suffice to say that traditionally the services of a well-versed mortgage broker will give you access to more funding options than banks themselves.
It is important to shop around and compare different financing options before you make a decision. You also want to make sure that you can afford the monthly payments, maintaining a contingency buffer in the interest rate or monthly repayment amount.
5. Manage Your Portfolio
Once you have your properties, you need to manage your portfolio. This includes things like finding tenants, collecting rent, and maintaining the properties.
It is strongly suggested to employ the services of a property manager to help you with this. They are skilled in the dealings with tenants and are across the legislative issues in the state.
It is important to be proactive in managing your portfolio. This will help you avoid problems and maximize your profits.
6. Monitor Your Portfolio
Once you have your property portfolio in place, it is important to monitor it regularly. This includes things like tracking the rental income, the expenses, and the property values.
Remember to ‘manage the manager”, delegate, don’t abrogate. You may also want to get a professional valuation of your properties every few years. This will help you to make sure that your investments are still performing well. The ongoing support of a property strategist will assist you in optimising the timing and location of your next purchase, hence leveraging your assets in order to derive a portfolio in the shortest possible time.
7. Review and Adjust Your Strategy
The property market is constantly changing, so it is important to review your investment strategy regularly. This will help you to make sure that your portfolio is still aligned with your goals and that you are taking advantage of the latest market trends.
You may need to make adjustments to your strategy, such as moving the emphasis of growth and income of properties you invest in, the locations you invest in, or your financing arrangements. Here to, the expertise of an experienced property strategist and other advisors, will be worth the investment.
Here is a summary of the 7-step success system for property investment:
1. Understand your goals.
2. Do your research.
3. Choose the right properties.
4. Get financing.
5. Manage your portfolio.
6. Monitor your portfolio.
7. Review and adjust your strategy.
By following these steps, you can drastically increase your chances of success in property investment.
Property Friends has very successfully supported its clients as a Property Strategist since 2003. For more information, feel free to book a Discovery Call by clicking here, to have a discussion about your personal circumstances and how we can best assist.
