#1 Start With One Good Investment
A journey of a thousand miles begins with a single step. And a portfolio of 10, 100 or 1,000 properties begins with your first property investment.
Many experienced investors speak of their first property investment as being their hardest, but that subsequent ones were significantly easier. Start small, start local, and work with an experienced broker to begin the journey of building a hugely profitable portfolio. If you get it right from the off, you’ll be starting with far stronger foundations.
#2 Always Buy Below Market Value
“Buy low, sell high” – that’s one of the secrets to rapidly building a property portfolio.
Every single month, residential properties are being sold for less than they’re worth, for a whole host of reasons, particularly where the seller needs quick cash due to a change in personal circumstances.
The trick to discovering these investment opportunities is to firstly look in the right places, and to then be bold with your offers; make many low offers on properties you’re considering and see which one gets a response.
Buying below market value will mean you have greater potential for a strong return on your investment.
#3 Make Money When You Buy
We’re of course talking about positive cash flow. Buying properties that have a positive cash flow (rental income minus property expenses) gives you the leverage and equity you need to invest in other properties.
#4 Shop With Your Imagination
Amateur investors buy properties based on their emotions; how they feel about the investment. But those serious about quickly building a portfolio of properties aren’t afraid to shop with their imaginations; not seeing it as it is, but how it could be.
This will enable you to buy all sorts of properties below market value and make your equity and financing stretch further.
#5 Buy at the Right Time
The property market goes through cycles. And just as a farmer needs to plant his seeds at the right time of the year, the successful investor buys properties at the right time in the property cycle.
So, keep an eye out for properties that are in a market that has hit the bottom but are starting to rise in value. And be careful about buying properties at the height of a boom, as you could be waiting a long time before they go up in value enough to be worth your time.
Read more: The Pure Commercial Finance Guide to Buy-to-Let Investment
#6 Avoid Cross-Collaterisation
This is where you take out a loan and secure it against more than one property. This can be dangerous because it puts you in a position where a bank can force you to sell multiple properties to satisfy the loan.
Generally, it’s better to ensure that each loan you take out is only secured against no more than one property.
#7 Work Closely With Your Broker
A key part of building your property portfolio is securing financing for each investment. And your number one ally in this is a reliable, experienced broker. Your broker will help you understand the funding needed and find you the best possible deal with the best terms. Getting a good deal on your property finance can go a long way to helping you build a successful portfolio.
