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Everything You Need to Know About Building a Property Portfolio

If you want to invest money that will provide you with great returns over a long period of time, you may have decided a property portfolio is for you. Despite some short-term dips, the property market does, on the whole, offer investors long-term gains.

With that in mind, here are some top tips as to how you can build a successful portfolio of properties:

Create a Goal You Can Stick To

Firstly, you need to establish what your goal is from your investment. For example, do you want to benefit from rental income, or are you hoping to generate one large lump sum over a certain period of time?

It’s also important to consider whether your property portfolio is going to be your main source of income, or whether it’s a supplement for other avenues, such as your pension or job. If you’re not sure, you may benefit from speaking to a financial advisor who will be able to advise what portfolio size will be right for you.
Consider the Risk
Most investments will come with some sort of risk, and this is also the case with property development. If you’re re-mortgaging your house to buy the first property in your portfolio, it’s crucial you’ve thought about the risks that are involved. For example, you’ll need to consider whether you could afford higher payments if the interest levels suddenly rose.
Equally, if you’re buying properties with cash, it may be beneficial to buy a number of cheaper properties that are in up-and-coming areas, rather than putting all of your money into one expensive property. To help with this decision, you might want to get advice from real estate consultants like GVA Grimley Limited.
Research Carefully
Most property investors will make money when they buy a house instead of when they sell it. That’s because they’ve done their research and they know where the demand is, which allows them to put in an offer that’s below the market value.
The savings you make by doing this allow you to get it ready for tenants or will add to your capital when you decide to sell the property at a later date.
Remember the Costs of Being a Landlord
If you’re building a buy-to-let portfolio, you need to allow for all the costs involved in letting properties out. For example, you’ll be responsible for the upkeep of the house, as well as all of the necessary safety certificates, and so on. Furthermore, if you decide to hire a letting agent, you’ll have to pay them property management fees, so always allow for these costs within your budget.
Equally, if you’re managing the property on your own, you’ll want to make allowances for credit checks, putting together tenancy agreements, and the time you’ll spend liaising with tenants and tradesman.
Creating a diverse property portfolio is a sound investment, especially when you stick to the aforementioned points to make sure you get the most for your money.