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8 steps to build your property portfolio

8 steps to build your property portfolio
1. Education – Learn as much as you can. Read about property cycles and property investors. Be comfortable with the inherent risks and benefits of investing in property. Will you hold for the long term or renovate and sell?  Understand the pros and cons of property strategies before moving on to the next Step.
2. Finance – Finance is the most important aspect of owning property.  Without it you won’t be able to buy. If necessary, obtain a Pre Approval for confirmation. Make an appointment with one of our experienced Mortgage Brokers to find out what you can borrow.
3. Set Goals – Why do you want to build a property portfolio? Get clear in your own mind why you want to buy. Is it to create passive income, if so, how much income? Is it to create long term wealth, then how much wealth is enough? Decide on what you want and stick to it. Make protecting yourself and your family from Risk a priority. Make an appointment with one of our experienced Financial Planners who understands property and will hold you accountable so you reach your goals.
4. Budget – How much can you afford from your own pocket? You must have a clear idea of what you can pay every month. Don’t be lulled into thinking the tax benefits will help.  You should be able to manage any shortfall from your pocket. Don’t guess on this step. Be accurate, honest and open. To know how much you can afford you have to know where your money goes now.
5. Build a Team – Surround yourself with people that have achieved what you want to achieve. Work with people who have bought and sold property and have an investment property portfolio. You want to learn from their experience. Ask questions. Education creates knowledge but not experience. Being able to rely on somebody when you have questions is invaluable. Having said that, be prepared to pay for this support if you have to. Be open about your goals and the reasons behind them. Everyone should be moving in the same direction.
6. Property selection – Use the expertise of your team  when reviewing property.  Select an appropriate property that fits within your goals and price range and Lenders criteria. Use Value criteria to select locations. Be guided by experts rather than by the casual observations of others.  Buy with confidence when the opportunity arises.
7. Reflect – once you have settled your first purchase take time to reflect on the experience.   If  multiple purchases are possible stop and reflect  before you proceed to the next purchase.  Property Investing is complex and you should take some time to digest what you have just achieved. Be comfortable with the whole process. Reflect on what you have gone through to get to this stage. Was it enjoyable? What went right? What went wrong? What could you change to make it better?  Provide feedback to your team. They want you to succeed as much as you do. Let the ownership experience happen naturally for a few months. Confirm your solutions to property management but don’t manage it yourself.
8. Repeat – Once you are comfortable with the ownership experience, the rent is flowing in and expenses are being paid, it’s time to consider going again. Building an investment property portfolio takes time. Simply repeat the process at Step 1. Believe me, you can never have too much education.

Remember, we are here to help. Good luck.

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Investors Direct Financial Group

Investors Direct Financial Group (IDFG) was established in 2001.
Our mission is to help our clients achieve and maintain their financial freedom.

Members of the IDFG Group include:
  • Nanmon Financial Services Pty Ltd, trading as Investors Direct Financial Group (ABN: 52 097 697 820 ; ACL: 402950)
  • ID Property Advisory Pty Ltd (ABN: 69 141 716 412 ; Real Estate Licence: 071792L)
  • Investors Direct Financial Planning Pty Ltd(ABN: 50 141 139 228 ; AFSL: 385827)
  • Investors Direct Property Management Pty Ltd (ABN: 59 153 184 859 ; Real Estate Licence:073458L)
  • 8 Star Homes Pty Ltd (ABN: 83 135 066 876)
  • Investors Direct Financial Services Pty Ltd ACN 608 410 591
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