Building a property portfolio can be quite challenging, however, with the rented sector growing at a fast rate, building a portfolio can be very valuable.
Let’s take a look at how you can start building a property portfolio:
– Think About your Goals
Are you looking for properties that increase in value? Or are you looking for an investment that will provide you with a continued rental income? Being able to answer these questions will help you to start building your portfolio.
– Start off Small
New investors are advised to start off small. While you may be thinking about investing in an expensive property, it could be a mistake. Choose your very first investment wisely and determine whether you want it to be close to where you live. The closer it is to your home the easier it will be to maintain, unless you wish to work through a third-party.
– Go Below the Asking Price
Prices are predicted to fall even further in the near future, so don’t be afraid to go below the current asking price. If your offer is declined you can always rethink your strategy.
– Consider your Cash Flow
Does the income you’re getting from rent cover your mortgage? Does it cover your other expenses too? When the property is empty are you still able to manage those mortgage payments? Keep an eye on all of these numbers so you know where you are all the time. Treat your cash flow the same as you would treat coming into and going out of a business.
– Consider your Tenants
Many landlords simply forget about their tenants, however, you need to make sure they are happy with the property. A happy tenant means they’re likely to stay with you for longer, which means the property is less likely to be empty. Choose the right tenant so the money keeps coming in and you don’t have to clear up after them when they leave. Alternatively, you could use a letting agent to choose the tenant for you.
Building a property portfolio can take time, but if you go about it the right way, you could have a lot of real estate on your books and a nice regular income.
