5 top tips for building a property portfolio

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What to do when you’ve got some extra money stashed away and want to make a savvy investment for your future? Property is always a great way to go, and can make you some lucrative returns – and best of all, it couldn’t be easier to learn how.

Investing in your first property can feel daunting, but it’s a great way to generate an additional stream of income as well as providing some long-term financial security for your family. Take the leap now, and you could find yourself retiring even earlier and enjoying the extra time in all of the luxurious ways you love best.

So, how exactly do you get started on this exciting new venture? And, more importantly, how can you maximise your returns?

While many investors are perfectly happy with making just one, building a property portfolio can set you up for considerable financial success in the long-term. Not only do multiple properties provide you with more income, but you will also be avoiding putting all your eggs in one basket – and if one investment fails for whatever reason, you will have several others to fall back on.

If you’re keen to take the leap into property investment, then look no further – because we’ve put together five helpful tips to help you build a lucrative property portfolio, starting today.

While many investors are perfectly happy with making just one, building a property portfolio can set you up for considerable financial success in the long-term

Identify your goals

It’s no secret that most people get into property investment for the money. Still, you must be clear on your specific financial objectives before you make any big decisions. Are you investing with an aim towards capital appreciation, or in order to maintain a sustainable rental income? Perhaps a combination of the two? Either way, setting out your priorities and goals will inform your decision when purchasing your properties and keep you focused throughout your journey.

Do your research

As with any investment, it’s wise to start by carrying out extensive research before any money changes hands. Research the buy-to-let market and find out the best cities and regions for property investment.

Don’t be afraid to seek advice from experts. Letting agents, brokers, and other property investors will all be valuable sources of information.

Start small

Don’t rush in and start buying multiple properties from the off. Take things slow to begin with and ramp your activity up gradually. A robust property portfolio requires firm foundations, so choose your first investment wisely. Take some time between your first investment and your second to ensure that you have everything under control in terms of maintenance and technicalities. When you start to grow, grow cautiously. The property market can be volatile, so you need to keep abreast of any changes and pay attention to your position regarding debt.

Don’t be afraid to seek advice from experts

Look after cash flow

Not all properties will generate an income, so you should always be alert to your cash flow status and keep an eye on your key performance indicators (KPIs). Before settling on a property, crunch the numbers to determine whether the rental income will exceed the expenses required to maintain the property and cover the mortgage. Positive cash flow will put you in a position to reinvest and grow quickly. Ensure you are equipped to handle any unforeseen setbacks, such as extended void periods or major property repairs.

Have an exit strategy

Finally, be sure to have your ultimate goal in mind throughout the process of building your property portfolio. Whether your ideal result is to have a sustainable retirement income or to liquidise your assets, keeping your exit strategy in mind will help you to make sensible decisions throughout.

By utilising these simple tips, you will be able to make more informed decisions about how you build and manage your property investment portfolio – and most importantly, set yourself up for financial success. Remember, you should always conduct research and seek expert advice before making any big decisions, but if you take the time to lay the groundwork then it won’t be long before you’re reaping the benefits.

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