Did you know that less than 5% of the Australian population owns 4 or more investment properties? (Australian Bureau of Statistics 2017-18 financial year report) It seems to confirm that only the dedicated few are striking while the iron is hot and making smart investment property decisions based on a sound purchasing strategy. Acting in a timely manner and becoming a part of that exclusive 5% is possible by following our 9 tips for to help you climb up the investment property ladder.
Tip 1: Always buy below market value
Build a low-risk investment property portfolio by locking in profits from day one and buying more investment properties sooner.
Tip 2: Acquire investment properties with a strong yield
Your investment property portfolio should enhance your lifestyle, not hinder it. An investment property with a strong yield (or rental return) reduces risk, making cash-flow less vulnerable.
Tip 3: Target investment properties with capital growth prospects
Search areas where new infrastructure, gentrification prospects, projects, major chain stores arising, openings and other specific growth activities which are planned activities either by the government or private property developers.
Tip 4: Value-add to investment properties if possible
Analyse potential gains before undergoing any renovation plans and ensure you use a professional renovation team to undergo work on your investment properties.
Tip 5: Understand opportunity costs
Developments, subdivisions, and extensions may seem like a good idea on the surface, but they can add an element of risk. Take time to understand the investment property numbers first.
Tip 6: Have an exit strategy
Understand there can be a smart time to sell an investment property, realise profits or minimise risks. Be prepared for investment property market and personal situational changes.
Tip 7: Remove emotional boundaries
Do you have an opinion or thought process holding you back? You need to remove these barriers to effectively move forward in building more wealth and income. Remember, figures do not lie, but emotions could cloud the facts.
Tip 8: Set financial goals
Planning is crucial. Set your sights on success by being clear on what you want to achieve and take the time to plan each step required to reach your financial goals.
Tip 9: Tax deductions are a bonus
Negative gearing is merely a sales trick. You should treat investment properties like a business and remember that a business that consistently loses money is not a success.
Gearing strategies can be made to work in your favour once the appropriate level of professional advice has been given. Treat investment properties like a business and keep an eye on the balance sheet.
Take your first steps towards creating or growing your multi-investment property portfolio beyond your dreams! Reach out to our experienced PIA team member at admin@propertyinvestmentagents.com.au to see how we can help you build your investment property portfolio.
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