Many Australians if they ever own an investment property, they invest in only one property. Why don’t investors own more than 1 property? Let’s ask this question – how much can you afford in own if each of the property is going to cost you $1,000 per month?
The truth is we don’t have much disposable income to spare in that many properties. Most people buy properties that cost them money each month thus they cannot afford to buy more properties because they have limited disposable income.
How can you invest more properties and grow your property portfolio?
- Start with a smaller and cheaper property to begin with and then you start moving to larger deals when you are equipped with property investing.
- Use your present property as a leverage by tapping into the equity in your present property to grow your property investment.
- Alternatively you can liquidate your present property to use the 20% as a deposit for your second property.
- You could tap into your present equity as a deposit on your second property.
- Use your investment properties to generate cash flow to service your monthly loans repayments.
- Increase your property value by doing minor renovations and improvements to uplift the property outlook hence the property market value.
- Have a mixture of positive cash flow and high growth portfolio.
- Never overcollateralise multiple properties in one loan in case you are force to sell all the properties.
- When the property needs to be sold, don’t hold on to a bad investment. Cut your losses when you discover your property is not generating capital growth.
- Always have an investment strategy which would help you grow your passive income to reach your retirement goal.
- Diversify your property investments in various suburbs, locations, residential, commercials, lands etc.
- Interests on loans might not be always good. Sometimes these loans hurt your pockets. Always be educated on various lending products.
- Always consult your accountants or financial planners who can give you a better financial and tax perspective advice.
- Remember to be smart in investing. Don’t invest blindly.
Article by A Chen