How to Build a Property Portfolio: 11 Tips for Buy-To-Let Success

build property portfolio

If you are thinking about a lucrative investment opportunity, Real Estate could be the right option.

Individuals and corporations alike purchase a property and rent it out to generate a monthly income. They extend this business by purchasing more property and renting it out, creating a compelling property portfolio.

If you are new to Real Estate, let us give you some tips on creating the right portfolio. These tips are as follows:

1- Take Advice from Financial Investors

Learn from professionals. Contact financial advisors and local well-known brokers to ask their valuation of a property. Consider their advice and see what changes you can make to your portfolio.

Also, read books on property investment. Books by Samuel Leeds and Rob More are informative. They provide comprehensive guidance along with examples. Some blogs, podcasts, and YouTube channels are also helpful in providing guidance.

Podcasts

  • The Property Couch
  • The Rental Rookie
  • The Remote Real Estate Investor

Blogs

  • Mashvisor
  • SparkRental
  • Forbes Real Estate
  • Coach Carson

2- Get Market Insights

After learning the ins and outs from different financial advisors, get some knowledge of the current marketing trends. You can look into competitors’ strategies, visit their sites, and check their social media pages.

People working in an international moving company also have great insights into the value of property in various countries. It’s important you first try to look for a property in the local market. When things go well, look at the international market and try to purchase property overseas.

3- Plan, Plan, and Plan

Since you will be investing a hefty amount in purchasing property, make sure to plan. Divide your plans into three parts: short term, mid-term, and long term. You should have at least a 12-month plan that includes the cost of buying property, selling price, and amount of total rental income.

Analyse how much you will earn from the rental income in a year. Compare it with the total price increase of the property in a year. If the rental income is more than the increased value of the property, continue renting it out.

4- Search for the Lowest Price

Never make the mistake of investing in expensive property. You will be earning less if you invest a huge amount and do not get a fair return as an investor. To make a good profit, it is better to search for the lowest-priced property. You can even get some renovation done on the property at the lowest price then rent it out to get a good return.

Never rush into anything; take your time in doing research.

5- Get Ready to Take Risk

Like every other business, you can never succeed without taking a risk. Though minimising the risk is imperative, you should never fear it. Being an investor, take a calculated risk and always have an alternate plan in mind.

6- Start with Something Inspiring

If you are looking to set up a property portfolio, your first property is the most important. So, give it your best shot – the first deal is likely to set a mindset about your business in your client’s minds.

So, make sure to give the best to your tenant at the best possible price. Remember, the first impression will last.

7- Wait for the Best Time

Smart property investors consider various factors before investing. First, they analyse the financial condition of the country before buying property. When inflation is high, prices of assets are higher, and therefore so is property.

Furthermore, it is important to consider other factors like purchasing power, economy, etc. For instance, during the recent pandemic, people were more concerned with buying essentials rather than luxuries.

Likewise, others who were going through a difficult time were ready to sell their properties at a low price. In this scenario, those who could afford to buy properties and wait for the long-term to sell them (2 – 5 years), made the most of the opportunity.

8- Specialise

Instead of trying your luck in different properties, specialise in a particular type of property. For instance, you can pick up a category of offices and purchase offices of various types, e.g., they might include offices for small business setups, large organisations, freelancers, etc.

Likewise, if you are targeting apartments, you can consider studio apartments, 2 bedroom apartments, penthouses, etc. Specialisation in one category will help you develop a good name in the industry. You can even earn a good online reputation, and people can easily spread the word about your service.

9- Dig Into the Demographics

Knowing the target market is imperative to planning your future tactics. When you know the demographics, you can plan out your future investments and marketing criteria.

For instance, if you are targeting students, you can focus on investing in studio apartments. Likewise, if your property is near a business centre, young professionals can be your target.

However, families can be the right target if it is in the centre of the main city with schools and hospitals nearby.

10- Be a Good Landlord

Maintaining good relations with your tenants is important to have repeat clients. Make sure to give everyone enough time, whether it’s about explaining the benefit of your property or negotiating on the rent.

If the tenant is calm and does not come up with repeated issues, be flexible in increasing the rental rate.

11- Focus on Positive or Negative Gearing Strategies

Positive Gearing Strategy

A positive gearing strategy is when the rental income is more than your expenses. In this case, you get a net profit on your investment.

Negative Gearing Strategy

A negative gearing strategy refers to the condition when the total rental income is less than your expenses. Here, you get a net loss.

Though most investors prefer a positive gearing strategy, negative gearing is also useful.

Positive gearing results in monthly profit and the return on selling the property. In negative gearing, we get some relief in terms of tax, and profit is made at the time of selling.

But, there is always some risk in selling property as there are no guarantees.

Wrapping It Up

All in all, building a property portfolio can generate a great ROI if we keep these few tips in mind. Always try to minimise your risk by doing extensive research and targeting the right area.

Whether you have a specific type of property or hold a mix of them, always have a clear objective in mind. Also, create a comprehensive strategy and predict your total return for a year. When you gather multiple properties in your portfolio, hire a manager and streamline your activities.

Have you created any property portfolios yet? What is your experience? Don’t be afraid to share some tips with us!

This article was written by Myrah Abrar. Myrah is a computer science graduate with a passion for web development and digital marketing. She writes blog articles for Asia Relocation international moving company.

 

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Millie is a perfectionist with a passion for property and writing articles. You’ll find her researching the latest housing trends and the newest up and coming areas worth investing in.

About Millie Archer 110 Articles
Millie is a perfectionist with a passion for property and writing articles. You'll find her researching the latest housing trends and the newest up and coming areas worth investing in.

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