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Property Investment Tips For Growing A Portfolio

By Kaye Dennan

Republish: EasyPublish™
Published: 14Feb2010
Word count: 450
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New investors in the property investment market often wonder how property investors grow their investment portfolios so fast. This may seem to be a mystery as one struggles to start their property investment portfolio but as time goes on and an investor sees their equity building it becomes clear how they can add to their portfolio.

It really isn't any different than the very first step of using equity in an existing property for the deposit on another. How investors can rapidly grow their portfolio is by the fact that they have a number of investment properties to work with.

How it works.

Say for example you have substantial equity in your current home and start property investing using the equity in the home to purchase your first investment property. As your home and your investment property increase in value, you will have enough equity to purchase your third investment property, but gathered from two properties. As the number of properties owned increases, the quicker you build equity and therefore the quicker you can purchase multiple properties.

1 property @ $300,000 X 10% = $30,000

4 properties @ $300,000 = $1,200,000 X 10% = $120,000

6 properties @ $300,000 = $1,800,000 X 10% = $180,000

It was not so long ago that properties were increasing at over 10% a year.

So you can see how once you have a couple of properties you quickly get the equity to purchase the next one. This is how property investors with several properties can grow their property portfolios so quickly. You often read about people who have over 20 properties and this is the strategy that is used. They don't get to that stage over night, it takes time to purchase the first ones and build the equity, but once you have several properties your portfolio can explode almost overnight in an upward market.

Of course there are a lot of other considerations too with loans and repayments that need to be taken into account.

If a property investor intends to live off their properties, at some stage there needs to be a strategy to have positive income from the portfolio. It may mean that an investor may stop buying for a while and allow the portfolio to go into a positive situation or the investor may sell one or two properties to lower the loan repayments.

Good times usually follow bad times and it is expected that the property market will recover over the next few years. Loan monies may be harder to get for multiple properties but all these factors can be addressed as a property investment portfolio is grown. Look around and read different property investment tips, develop your property investment strategies and build for your future.

Kaye Dennan has over 15 years being associated with property investment. For more insight into property investing go to Property Investment Know How.

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