Building a property investment portfolio

Building a property investment portfolio

If you’re interested in investing in property, effective planning can
be the difference between an average investment decision and
building a successful property portfolio that provides a steady
income and capital appreciation.
An increasing number of Australians are investing in property to grow their wealth.
According to recent data from the Australian Taxation Office, 2.2 million Australians
(around 20% of the tax-paying population) own at least one investment property – and
28.5% of Australian property investors own two or more investment properties.
 

So, how are they doing it? 

Building a successful investment portfolio doesn’t necessarily
require a huge amount of money. But it does require commitment, quality tax and
property advice, and a sound investment plan.
Here are some things to consider before you get into property investing.

What are your property investment goals?

For investment properties, there are two main sources of return: rental yield and capital
growth. Ideally, you’ll want to achieve both; however, experienced property investors
usually prioritise one source of returns over the other as part of their investment
strategy.
Rental yield is the return you receive on the property through rental income. It’s
calculated by dividing the annual rent by the market value of the property. If you choose
a rental yield strategy, your goal is to find a property that compares favourably to other
properties and other types of investments. For example, rental yields in regional areas
tend to be higher than in metropolitan areas. Seeking a high rental yield may suit you if
you don’t want to borrow a lot of money, or if you’re seeking a source of additional
income to live on.
Capital growth comes from an increase in the property’s value. If your aim is capital
growth, you will need to be able to afford to hold onto the property until you see a
substantial rise in the investment’s value. The right property, in the right location, at the
right price, has the potential to deliver rewarding capital growth over time. You may then
be able to use some of the equity you’ve built up in that property to add to your
investment portfolio.

What’s your budget?

When considering investing in property, it is important to have a good understanding of
your borrowing capacity and rental income requirements, as well as the ongoing costs
you will need to budget for as a landlord.
Mortgage Choice in Clarkson WA, broker Mandy Dickerson 94079881 can help you determine your borrowing
capacity, so you understand your budget when it's time to start looking for a property.

Once your broker has a solid understanding of your financial situation and investment
goals, they can give you an indication of your borrowing capacity and help you apply for
pre-approval for an investment loan. Lenders will assess your borrowing capacity in the
same way they do for an owner-occupied loan; however, they’ll also take the potential
rent into account as an additional source of income for you.

How to determine strong growth areas?

When building a strong, profitable property portfolio, it’s important to do your research
and evaluate potential growth areas.
Ask your Mortgage Choice broker Mandy Dickerson for a free PropTrack property
report to gain insight into the growth trends of your desired investment location.

What type of tenants do you want to attract?

Deciding on the type of tenant that you want in your investment property may help
guide your investment decisions.
For example, young professionals are likely to be interested in smaller dwellings – such
as apartments and townhouses – that appeal to their lifestyle, and are located close to
amenities, transport links and the city's central business district.
On the other hand, families may be more attracted to larger properties in the suburbs.
Therefore, you will want to consider things like the location of schools, local
supermarkets and outdoor recreation areas.
When considering location options for your investment property, you will need to do
some research into the demographics of the local area so you can determine what type
of tenants you may attract.

What’s your exit strategy?

Not all properties can generate successful investment returns. While there are things you
can do to increase the attractiveness and value of your investment property – from
simple renovations to comprehensive refurbishments – you may not receive the returns
you were anticipating.
Having a plan for how and when to sell a property should be part of your investment
strategy. Even if your property generates a strong return, there may be a point at which
you need to access your capital in the future.

 

 

Why Use A Mortgage Choice Broker

Wide choice of home loans - Get a great deal

Access hundreds of loans from our wide choice of lenders, including the big 4 banks. We shop around for you and your broker can negotiate a competitive rate.

We dont charge to find the right loan for you

Your broker is paid by the lender once your loan settles. In some limited circumstances your broker may charge a fee, which would be discussed with you before proceeding.

Expert Advice

The banks are competing hard for your business. Let us help you choose the right home loan with expert advice at no charge to you because the lender pays us after your loan settles. 

Convenience

Hectic lifestyles don’t leave time for long daytime meetings at the bank. We offer appointments at the time and place that suits you, including after work.

We Do All The Hard Work

From comparing home loan options to preparing the paperwork and supporting you through to settlement, your mortgage broker does all the running around.

 

How Do You Get Started?

 

Even if you’re brand new to property investing, there are many resources available to
equip you with the knowledge and confidence to take that first step on the property
investment ladder.

If you’re keen to build an investment property portfolio, get in touch with Mortgage
Choice Clarkson for northern suburbs WA, broker Mandy Dickerson on 94079881 or mandy.dickerson@mortgagechoice.com.au. or book online on this website

We’d love to help you get started.