6 tips to a profitable property portfolio

01-Jul-2016

Following these property investment strategies will help you improve returns while reducing risk as you manage your property portfolio.

The aim as a property investor should be to adopt strategies that allow you to build a high-performing property portfolio. Keeping these proven, best-practice strategies will put you on the path to financial success, and potentially make you millions.

1. Educate yourself

Attending a one-on-one workshop that is tailored to your level of experience can teach you most of what you need to learn – and then with the help of an experienced property advisor you can pursue smart, safe strategies.

2. Insist on better property valuations

Valuations are not an exact science, but banks are typically conservative with their valuations, whereas a savvy advisor can work with experienced valuers to legitimately get an appraisal that reflects a property’s true potential.

3. Avoid the risks of cross-collateralisation

Most banks like to cross-collateralise; this means they use more than one property as security for a loan. This practice ties you to one lender and their valuer, and if one property rises in value but another goes down, it can have a major impact on the amount of money you can borrow.

4. Take advantage of research

Good research is at the heart of successful property investment as it can identify the best cities, regions or suburbs in which to invest – and which ones to avoid!

5. Stop procrastinating

Remember that a $500,000 property grows by almost $1000 a week on average, so every week you delay can cost you a significant amount of money. Take action and implement your strategy!

6. Adopt smart strategies

Having extra funds for income protection and financial buffers is an essential property risk-management strategy. These reserve funds are valuable during downtimes in the property cycle, if unexpected expenses arise, or in a worst-case if you lose your employment income. A good investment advisor can help you weigh up risks against the possible cost of lost opportunity!

This article was originally written by Richard Sheppard for the July 2016 issue of Peninsula Living magazine.



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