If you want to learn to boost your property portfolio by growing it but find yourself stuck and unsure about how to take that next step you are not alone and are a part of the majority of property Investors in Australia.
Did you know that less than 10% of Australians actually own an investment property and out of the 10% who do less than 1% own 6 properties or more. If you find yourself in this position and want some tips on how to boost your portfolio then my tips below will help you get there.
1. Leverage the equity you have
By already having one or two or more properties you will hopefully have equity in these properties that you will be able to access. Speed up your property growth by leveraging this equity by borrowing against it to fund the deposit for your next investment property. Your mortgage broker can arrange to have this done for you.
2. Invest in a mix of properties that provide you a positive cash flow and high growth
The biggest problem holding investors back from growing a portfolio past a couple properties is the issue of being able to service the shortfall in repayments and expenses on the investment properties held. By investing in cash flow positive properties as well as high growth investments this will balance your returns out rather than each property putting you out of pocket
3. Increase the value of your properties
You can increase the rental income and the value of your property by doing some minor or major renovations. Something as little as a fresh coat of paint and new carpet could make a massive difference to both your rental returns and the value of the property. A common strategy that some investors use is buying older properties, renovating them and renting them out. Upon completion of renovating you can get them re-valued, re-access the equity in the property and go again.
4. Keep accurate records and monitor your portfolio
Building a property portfolio is much the same as running a business. Keep accurate finances of the outgoings and the rental income and monitor the condition of your property. Choose your tenants with care to ensure you have no trouble with getting paid on time and ensuring the property is kept in good condition. By spending time monitoring your portfolio you will be in a decision to be pro-active and this will avoid any hurdles down the track that may prevent you from growing your portfolio.
5. Don’t Cross Collateralise
Cross collaterisation is where you have multiple properties securing one loan. This puts you at risk as it gives the bank unnecessary control over your assets. In addition to this, by financing each property with a different lender you are increasing your serviceability as lenders will base your repayments on the interest rate you are paying rather than the additional margin they put on top.
6. Have a Mortgage Broker who specialises in Property Investment Loans
Having the right Mortgage Broker who specialises in investment property loans will help ensure you have the right finance strategy in place to grow your property portfolio.