Success in property investment doesn't happen by chance, it requires careful planning and a strategic approach. We reveal the strategies that people with multiple properties are using.
While more than 2.1 million Australians’ call themselves property investors, you might be surprised to know that less than 20% have more than one investment property. And, despite being the number one investment class, ‘portfolio investors’ make up a small proportion of those building wealth through property.
Success in property investment doesn't happen by chance, it requires careful planning and a strategic approach.
Here we explore three key aspects crucial to building a successful property investment portfolio:
Before diving into the world of property investment, it's crucial to develop a comprehensive investment plan. This plan should outline your financial goals, risk tolerance, and the timeframe for achieving your objectives.
Having a well-defined plan will help you stay focused and make informed decisions throughout your investment journey. Here are three key considerations when creating your investment plan:
Equity is the difference between the property's market value and the outstanding mortgage amount. Equity is a powerful tool in portfolio investment, allowing investors to leverage existing assets to fund new acquisitions. Using equity to fund purchases can offer several advantages:
While negative gearing is a strategy well known for its tax advantages, investors should also understand positive gearing. A property can be positively geared when the rental income exceeds the associated expenses, resulting in a surplus.
A multi-property portfolio with positive gearing can significantly contribute to wealth creation. Here's how:
Building an investment property portfolio is a strategic endeavour that requires careful planning and informed decision-making. By developing a solid plan, leveraging equity, and harnessing the benefits of positive gearing from a multi-property portfolio, investors can create a path to long-term financial success through property investment.
Partnering with an award-winning property investmentfirm, such as DPN, will help guide you towards making smart, research based decisions. Contact DPN for help implementing your strategy to become a successful portfolio investor.
Remember, patience and a commitment to ongoing education are key to navigating the dynamic landscape of real estate investment.