Tips to build your property portfolio

Julian Fadini | August 13, 2018

While there are many options to choose from when it comes to growing your wealth, investing in property turns out to be one of the most reliable, effective and secure in the long run. Arranging your finances and planning your future can be enhanced with the right kind of strategy. This will also help prepare you for the inevitable roadblocks in your journey as a property investor.

With newspaper headlines and online media sources talking about the economy and the weakening property market, you might have second thoughts about building a property portfolio. But with a little bit of research, you’ll find that the country’s housing markets are not performing anywhere near as badly as some of the scary headlines would suggest.

It is never the wrong time to invest in property. The question that remains then, is where, rather than when. Rather than timing the market, we recommend laying emphasis on finding the right property deal. Here are some tips to help you formulate your own property investment strategy in accordance with your financial goals -

Macro-level research

When it comes to property investments, location is everything. You may not be able to control the changes made at the macro-level, but you need to be able to understand them regardless, in order to make the right decision. Make sure to check the area’s historical data and consider the pattern of capital growth.

Micro-level research

After deciding the city, you will need focus on areas that promise growth in terms of property. Remember, these are investment properties and aren’t being purchased for you to reside in. Central proximity to employment nodes is one of the most important feature to be taken into consideration. You may be able to discern the potential of an area through the leadership of the local council. Zoning changes, potential infrastructure projects and other information can be obtained from them in order to help you make an informed decision.

Understanding the growth cycle

You need to be able to identify the growth spurts and potential of a particular area. We recommend staying away from the middle or the end of the growth cycle. Conduct your own research about the industries of a region, the potential economics and the future of the area before deciding upon the location of your investment. Factors such as the tenant profiles, industrial diversity, job growth and planned infrastructure development should be taken into consideration to ensure year on year profit growth for your potential investment. Data indicates locations that hold steady long-term growth are generally located within 2-12 km from the CBD.

Housing supply

Property prices are often greatly influenced by the ratio of supply and demand. Any city can be over supplied at any point of time and past experiences prove that one must be weary of getting too confident about it. Sometimes you might need to pay for good advice that can be key to making the right choice as far as your future is concerned.

Style of dwelling

The houses versus apartment debate differs from city to city. Generally, it is found that apartments prove be better investments in the long term. Before deciding upon an investment though, you must take the time to check out the individual body corporate. Avoid big ticket amenities like lifts and swimming pools, because although they might attract the tenants, you might be the one paying for them. New property apartments tend to involve further costs. We recommend low-density, small complex and low maintenance properties.

General sentiment

Finally, confidence in the market can’t be discerned only through numbers and charts. Generalisations can be dangerous. Rely on your gut after visiting the area, surveying the location etc. Do not hesitate to get down to the street level to conduct your surveys. We recommend having a forward-thinking approach to your property investments – this means that it is not always be about how it looks now, it is about how is it going to change over time.