The Business Of Growing Your Property Portfolio

The Business Of Growing Your Property Portfolio When it comes to playing a successful portfolio game, you only need to think back to all those family-arguments had during and after a game of Monopoly; a game that teaches you all you need to know about building wealth through property acquisitions because, let’s be real for a moment, whoever has the biggest portfolio always wins. The hardest part is making that initial investment. It’s taking that daunting first step, biting the metaphorical bullet, and using your first success to go from one property to a collection of money-makers and wealth-builders. It takes time, it takes money, it takes effort and, above all, it takes guts. But get it right and you are sitting prettier than Beyonce in a gold throne. To help you get to this stage, we have pulled together a list of steps you’ll want to study. We speak about how to finance a buy-to-let property, how to turn it into a super-profitable investment, what it means to make a smart decision and how to build from a sturdy foundation. So, without further ado, let’s take a peek into the world of property portfolio building shall we: It All Starts With A Single Good Investment There are a million cliches about the importance of that first step and how an adventure of a million miles starts with a single step. The same rule applies. It doesn’t matter if someone has accumulated a portfolio of five, ten, twenty or a hundred properties, they all began with one investment. The problem is, this first one is always referred to as the hardest one of the bunch. But as tough as that pill may be to swallow, there is a silver lining: get the first one out of the way and all subsequent property purchases will be significantly easier. The trick is to start small, not get ahead of yourself, focus on getting that first purchase right, buy somewhere local and to work with a property broker that’s both experienced and trustworthy. The better you start your portfolio journey the better chance you have of being a success story, quickly. Get it right with your first effort and you’ll have better foundations to build from (excuse the pun). Don’t Pay Market Value. Ever. If you want to be the prince of property and grow a portfolio fast, you need to remember one rule above all others: buy low and sell high. That’s the not-so-secret to success. Now, you may be thinking it’s impossible to buy a property for less than the market value because people are savvy sellers these days, but you’d be surprised just how many properties get sold for a bargain (read: less than they’re worth). There are so many reasons people need a quick sale, from a change in personal circumstances to an injection of cash for business reasons. The trick is knowing how to find these types of investment opportunities. It’s about looking in the right place, having a great relationship with local realty agents, having a look at auctions and keeping your ear to the ground. Once you’ve found a possible opportunity, hit them with a low offer and see what comes back. The lower you can pick a property up for the more you can make on the return. Look For Off-The-Bat Money-Makers When we talk about positive cash-flow, we’re talking about properties that will make you money straight away, which is to say a rental income that outweighs the property expenses. This will give you the leverage (and equity) you need to add more properties to your portfolio. Obviously, the greater the positive cash flow the quicker you can invest in another place which, let’s be honest here, is the aim of the game. It’s a rise from nothing to something in the shortest time possible. Don’t Let Emotion Get A Say The thing that separates amateur investors from serious property portfolio players is emotion. Amateurs can’t help but invest in properties that pull on their heartstrings and make them feel a certain way. Don’t be one of these people. Don’t let emotion dictate what you buy. Instead, look at potential investment opportunities with a more creative outlook, one that lets you see a property as it could be and not as it is right now. And don’t just stick to residential properties either. Yes, they may be the obvious choice, but investing outside the box and looking for motels for sale, industrial warehouses, commercial property, gyms, leisure centers or anywhere else that might return a healthy chunk of rent without much tenant turnover is well worth a second thought if you ask us. Wiping your emotion down will allow you to invest in all sorts of properties below the market value, and that will allow you to stretch your equity and finances further much further. Life Is All About Timing We’re going to do away with Monopoly example this time around and make you think of this from a farming point of view instead. Why? Because the property game goes through ups and downs. It’s a cycle. So in the same way a farmer needs to sow their seeds in order to get the best results, the same principle of timing has a role in good property investing. The most successful investors buy at the most prime time of the cycle. The trick is understanding your local market, keeping an eye on the prices and picking up properties you believe to be at rock bottom prices knowing there is only one way they can go from there up. Getting this perfect is no easy feat, but so long as you don’t pick up a property at the peak of a market boom, you should be able to make a decent stack of dollar bills off it. If you do pick up a property at the height of the market, you’ll be waiting a long time to make any dollar of it. Become Best Friends With Your Broker In order to become a successful property player and build an enviable portfolio, you need to be able to secure financing for every single investment. This can be tricky. Or it can be made a whole lot easier by having an ally in the form of an experienced, reliable and trustworthy finance broker. Have someone like this in your corner and you have a far better understanding of the finance you’ll need, the best possible deal you can get your hands on, what the best terms to suit your needs are and just generally boosting your return. We can’t stress this enough: getting a great finance deal when investing in a property is one of the safest ways you can grow a successful property portfolio quickly. Research Everything You Can Think Of When you think you’ve found a great investment opportunity, the next thing you need to do is pull on your researcher’s cap and analyze everything you can about the area this property is in. Location is everything in the investment game, so make sure you know everything there is to know and whether this ticks all the right investment boxes. Local amenities, employment growth, young graduates, number of creative types, schools, hospitals, transport links all of these will tell you whether an area is up and coming. If it is, and you’ve found a gem of a property in there, grab it. You can be sure you’re not buying a dud if you’re buying in a good area.