Everyone has a different reason for delving into property investment. For some it may be a way to spread assets and build equity, for others it may be to secure a financial future in retirement. Whatever the reason, chances are that not all investors plan on their property portfolio stopping at just one.
There are many reasons why these plans falter. It may be a lack of borrowing capacity to purchase again, an under-performing property, changes in personal or financial situation, or simply losing sight of the bigger picture.
And this is not an uncommon situation to find yourself in. You are not alone, with an estimated 73 per cent of Australian property investors calling a halt at one property.
However, consider this: Property investment is one of the more stable investment structures, as market trends tend to move slower than other forms of investment, such as shares and stocks. This allows investors time to appropriately consider changes such as selling and buying.
We often hear location is key in real estate. There is a lot of truth to it as buying in the right area will positively affect your property, its value and your return.
If your first property is doing well, this will naturally act as a motivator for future purchases, with capital growth often helping to fund a second.
Looking at past property performance and growth areas will provide valuable snapshots for potential investment.
If you’re stuck with an under-performing property, consider your options and speak to financial and property specialists. Riding out the market, or selling and starting a-fresh in a well-performing area may be options to consider.
Having a long-term plan for building your property portfolio, and understanding what is needed from each property to build on this, will ensure a healthy investment future.