You know that investing in property is a good way to build wealth, but you’re not entirely sure what sort of property to invest in first. There are many schools of thought around how to create the most effective investment portfolio and whilst we are not financial advisors, we can share our experience, and the advantages, of building new properties for investors.
Building a property investment portfolio
Creating and growing a property investment portfolio takes time, research, effort and a little luck! Typically, your first investment property is bought with a large chunk of savings OR by using equity in your primary place of residence. Ideally then you continue to build your portfolio without having to use any of your ‘own’ money – you simply keep using the equity in the properties you own.
The key to a successful property investment portfolio is to include properties in areas with good capital growth potential, buy homes you can add value to through renovation, buy homes that are attractive to renters (good services, location, facilities, affordability), and/or build a new home in an area with high rental yields. As with any kind of investment, diversity is often a good rule of thumb.