Did you know that around 2 million Australians own an investment property? That’s a considerable amount of people who have chosen real estate as their investment avenue, and for good reason too. Although the property market has it’s ups and downs, it doesn’t experience the same crashes that stock markets go through. So, whether you already have a few investment properties in your portfolio or just starting on your journey, we have compiled a list of tips to help guide you.
Building A Strong Property Portfolio
There is no one strategy that is guaranteed to work for everyone when it comes to building a property portfolio. Some people have a knack for flipping older homes but not everyone has the motivation or means to make this happen, so, for some, it is more viable to purchase a modern property they can hang on to for years to come.
The key to building your property portfolio is ensuring it is balanced. This means that the property is paying for itself and all you need to do is simply manage the property and keep it tenanted. This takes us to our next tip…
Make Sure Your Property Has Sufficient Yield
Everyone has their reason for choosing a rental property whether it’s for lifestyle, the property is in a booming area or otherwise, but, one common reason that makes a property appealing is its yield. You should make sure that your potential property will generate a sufficient net yield. It is highly important to consider this as there can be quite a difference between gross and net yield and you do want to get caught out thinking you are getting a greater return than you actually are.
Choosing The Right Investment Property
Depending on your current lifestyle and what kind of property portfolio you are trying to build will determine what kinds of properties are the most suitable to invest in. For example, if you’re a young couple looking to keep costs to a minimum, you may want to look at investing in a small apartment that is well within your budget and appeals to the young market of renters who want to live in infrastructure dense areas. Or perhaps, you’re an older couple looking to retire within the next few years and are looking to invest in a property you can retire into down the track. At the end of the day, the most important thing is to make a purchase that aligns with your goals and is within your means.
Donna Etchells - McGrath Estate Agents 