The “Sette Bello” of Property Investment
(The beautiful seven)
Although most property investors aspire to building a portfolio of multiple properties, 72% own only one investment property… so what’s holding you back from buying more?
You need to understand the 7 key steps to follow in order to set yourself apart from the average investor.
- The first step is to develop a long-term plan that deals with your risk profile, current situation and financial capacity. From there you should develop a long-term plan identifying the types of properties that are suited to your portfolio, the estimated time frames you can achieve those goals and what steps you need to take to achieve them.
- The second step is to organise your finances so you have an understanding of your budget. Be sure you deal with a broker who specialises with investors and who understands the dangers of cross collateralisation.
- The third step is to buy your property. The performance of this property will have a significant impact on the time frame you can purchase your next property. Therefore, be sure to thoroughly research your chosen area and use the assistance of an agent, if need be.
- The fourth step is to look at ways you can add value to your existing property. Rather than waiting for the market to increase, you can add value to your properties through renovations or development, which speeds up the wealth creation process.
- The fifth step is to effectively manage your property to achieve maximum returns. Don’t choose the cheapest property manager as you may be getting what you pay for. A good property manager should be up to date with market rental and suggest ways to generate higher rents.
- The sixth step is to work on your property education. It’s beneficial to surround yourself with good advisors but don’t become too complacent.
You’re investing a significant amount of capital and should take an interest in the market. This is as simple as attending property seminars, reading the newspaper and online articles.
- The seventh step is to regularly review your portfolio. Circumstances change and so does your investment profile. You may need to offload some stagnant properties in order to take advantage of new opportunities.
Please refer to your Optima Partners advisor before selling any investment property to determine any tax consequence.
There’s no end to the opportunities that can be had from strategic planning in the property market. Whether it’s the worst house in the best street or the sole remaining market garden in a newly established suburb, these seven steps will assist in achieving your investment goal.
- 72% of property investors own one property
- 18% of property investors own two properties
- 5% of property investors own three properties
- 2% of property investors own four properties
- 1% of property investors own five properties
- 1% of property investors own six or more properties
Source: Australian Taxation office