A 10-Step Guide to Growing Your Property Portfolio Quickly

When it comes to building wealth, the golden rule of the board game Monopoly often applies: whoever has the biggest property portfolio, wins. However, starting a property portfolio, and taking your investment from one to several properties takes a lot of time, money and effort. If you’re wondering how to make a property portfolio, this article will show you how to finance a buy to let portfolio and turn it into a highly profitable investment by making smart decisions and setting a strong foundation. So, without further ado, here's how to build a property portfolio quickly:

Exterior of a multiple storey building with a balcony

#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

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.

 

#8 Research, Research, Research the Market

computer man

You need to learn how to analyse and research an area that you’re considering buying property in.

Soon you’ll be able to spot those property gems and up-and-coming areas quickly; this is the best way to avoid buying the right house in the wrong area.

#9 Delight your tenants

The health of your rental income streams is determined by the satisfaction levels of your tenants.

This means making sure their experience of your property is positive. In other words, positive tenants lead to positive cash flow.

The way to do this is to invest in a property management team who are passionate about customer service.

 

Read more: A Guide to being a Landlord in 2016

 

#10 Remember the 100-to-1 rule

For every 1 property you hope to acquire, be prepared to look through and make low offers on 100. This rule will protect you from making hasty decisions that you later regret.

 

Need Help With Your Property Portfolio?

If you have any further questions on how to grow your property portfolio, or you are looking to secure funding for your next investment, get in touch with our experienced team today.

 

Article By Ben Lloyd

June 24th, 2014

Ben is the Director and Co-Founder of the Pure Group and Managing Director of Pure Property Finance.

Following a career in Barclays, where Ben was in the real estate finance team for 8 years, he decided that the market needed a more forward-thinking type of commercial brokerage so founded Pure Commercial Finance (now Pure Property Finance), the first company within the Pure Group.

Ben has extensive experience across the real estate sector and has participated in over £2bn of real estate transactions during the course of his career.

Ben oversees the general strategy at Pure Group and works with the senior leadership team to drive the Group forward. Ben is also on the Executive Committee of FIBA.

See more articles by Ben

Ready to talk finance?

Call us and speak to one of our experts

02920 766 565 Request a Callback