If you own a single investment property and are having an internal tussle about increasing your property portfolio, you might like to read on.
Wherever you are, there is a property cycle that is moving to its next phase. Prices may be rising or falling; banks may be making it easier or harder… It’s possibly a completely different scenario to when you bought your first investment property.
So, what might be holding you back? Did you get that first investment right?
Congratulations! You did your pre-buying research into location, historical growth, infrastructure, accessibility, supply and demand, rental yields and so on. You bought the right property in the right area and you are now seeing enough capital growth to make a deposit on number two.
Get strategic. First up, review and assess property #1. Is it still a good performer? Is it where people want and can afford to rent?
Think of a property portfolio as multiple investments each having their own function. For example, how much rental income should a property bring in to ensure your portfolio is performing well and allowing for further growth? How do you expect each property needs to function in terms of capital growth in an anticipated timeframe?
Don’t feed the weeds.
The worst thing about an underperforming property is that it can stall your forward momentum. Even if it is your only property, be strategic. Selling that first investment and starting again is not a backwards move if it allows you to purchase another property that better performs to the goals you’ve set for your financial future. And it is likely that lessons you’ve learned will hold you in very good stead.
Real estate investment is a long-term strategy designed to help you reach long-term goals. To build a portfolio, you need a strategic property plan that works for you, but you don’t have to go it alone. Invest in the expertise of others, the financial people and the real estate agents, to make your property investments work for you. Get that team of advisors on your side.
Because each investor’s circumstances are different, it comes down to the objectives of the individual, whether you are you are looking for cash flow or capital growth, for instance.
Check your investment strategy. Will it allow you to grow a property portfolio and achieve your financial goals?