Growing Your Property Portfolio

Property remains a secure long-term investment vehicle that many say is unparalleled by any other. Since 1996 property prices have risen by 168% – an average yearly growth of 21%. In the past property prices have increased twofold every 10 years or so regardless of short term variations in the market. All these benefits present a lucrative opportunity for astute investors. As a result, many people have chosen to develop and expand their property portfolio.

Growing a portfolio is considered a wise decision if you want to take responsibility for retirement income and future wealth. So how should you go about growing your portfolio?

Decide why you want it

When you have made the decision to expand your portfolio, you should then ask yourself: Is it for income or for capital gain? Is it for the immediate future or for the more distant one? Would you rather have it as a DIY pursuit or for making investments with others to work for you? Your objectives are essential and your strategy hinges on your resources. These resources don’t just point to your funds but also your expertise, experience and your inclinations. Consider your alternatives, decide what you want to attain.

Do your homework

Being effective in the business of property investing means that you have to be well-versed in the markets thus you need to perform due diligence. Keep track of property prices, costs and the major trends in the area you are thinking about investing in. Talk to experts and get as much information on what’s happening in the area and what the future trends will likely be.

Build on what you’re already knowledgeable about

Some experts think that it’s a good idea to stick to a single form of property and rental accommodation. This will help you develop your expertise and allow you to have a stable pattern that you can keep repeating again and again.

Find the right property

When selecting investment locations, ask yourself if you want to be situated near your investment so you can run it yourself or if you want to hire the services of a letting agent instead. Ask letting agents about the rental yields in the area. If you can, meet all the estate agents in the area as you might find a bargain property. Visit as many properties as you can. Several skilled landlords look into as many as over 20 properties before they make a commitment. When you find a property, make sure it’s a bargain.

Buy below market value

Many property investors know that the key to a good investment is to purchase a property at the lowest possible price. May experts advise buying average homes in average areas with healthy rental demand. Two of the most popular ways in which investors can find below market value properties are through advertising and property auctions.

Advertising for distressed sellers is an effective means of locating bargains. Make sure to use newspaper advertising, leaflets, yellow pages, radio, television, and the Internet to find investment properties. Another way of finding good deals is to buy at auctions, where a property is typically sold 15 to 20% below the market price. Savvier investors can seize bargains of up to 30% below estate agent prices.

These initial steps should get you going well on your way to expanding your property portfolio. With the property market continuously perceived as a prime choice for investors, it becomes inherent that you grow and develop your portfolio and enjoy the benefits that a bigger portfolio brings.