Starting your property portfolio from nothing
By Advantage Property | 5th Dec 17
It is still very possible to start a property portfolio from nothing
The property market surge has really affected many Australians when it comes to home ownership, but it is not all bad news from here. It is still very possible to start a property portfolio from nothing – believe it because we have helped many investors! From our perspective successful investing is based on an intimate understanding of the property market as well as a fluent understanding of your own personal financial situation such as earning capacity, spending and saving habits. We start from here because it’s important not to rely so much on luck when investing – it really all comes down to the numbers. We are going to take you through some options if you are starting from scratch and thinking of entering the property market.
The rise of the rentvestor
We applaud the rentvestor! Why? Because rentvestors have changed how they think about property – from being the one big nucleus that holds everything together to one where they can see their investment grow while keeping the lifestyle they prefer. Rentvestors are notorious for renting in suburbs close to the city or where they work, while they invest by purchasing property to rent out. This tactic is most likely to see your property portfolio grow faster than if you went down the more traditional avenue of being an owner-occupier first, and then an investor. Do your numbers if you are choosing to go down this path as you will want to ensure that your expenditure versus your income is sustainable and aligned to your long-term goals (i.e. Negative gearing or positive gearing).
The buy and flip technique
With the rise of popular TV shows such as The Block, the buy, renovate and flip technique has inspired many to give it a go. Warning, this is not for the faint hearted as you require enough capital, cashflow and the skills (if you are renovating yourself) to pull this off successfully. Done right, you can really create great capital growth in your portfolio if you buy well, renovate to the right perceived market value and sell to a profit.
Really understanding your financial situation and what your plans are for the future is key to setting up a successful strategy for your property portfolio. You can start small and build on your portfolio, or if you have the adequate skills, take a bigger risk with buying and renovating. Either way, there is a small element of luck involved, but we would not solely rely on good old fashioned luck to be a successful investor. Do your numbers, study the market and be ready for the opportunity to arise!
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