Property for lease.

Top Tips for Boost Your Property Portfolio

As the age-old saying goes, “People do not plan to fail. They fail to plan.” This sums up the financial situation of many people. Perhaps, even you. However, if you have a property portfolio or are beginning one, you are on the right path to a successful future.

Property investment has the potential to lead to a substantial amount of wealth. However, it is not always easy to know what moves to make, especially in an ever changing market, or how to expand your portfolio. Before buying any investment, you should seek your accountant or financial planners advice in regards to your financial position, affordability and any tax implications.

Here are five no-nonsense tips to help you boost your property portfolio.

1. Leverage Equity

The ability to leverage the equity that you have built in the property or properties you own is one of the features that make investing in property so attractive. Using your equity, you do not need to come up with a substantial amount of cash from your pocket to purchase another property. The cycle continues property after property, and eventually, you are netting a tidy sum each month.

There are several rewards for those who decide to leverage equity to build wealth.

  • A potential for a sizeable return on your investment.
  • Increased monthly cash flow is possible if you leverage equity for investments rather than dip into your cash reserves.
  • You may be able to increase your tax deductions. Often, investors can deduct mortgage payments and rental property improvement expenses from their taxes.
  • Diversifying your investments will decrease your financial risks.

2. Create Cash Flow

Cash flow is net income from a real estate investment after mortgage payments, upkeep, and other expenses are met. The ability to create cash flow is a huge benefit of property investment.

Often, this benefit is not one that investors consider. By maintaining cash flow, you are paving the way to making more wealth through property investment in the long run.

Lease agreement.

3. Renovate to Increase Equity

You can increase your property’s value by doing some renovations. You do not have to invest the money on an entire redo, but some strategic improvements can add to the equity.

  • Outdoor Renovations – You don’t need to put in a pool and a fountain (although those are lovely additions). Adding an alfresco area with space for dining and a firepit will boost value. You can add a deck, but stone patios are very popular and make excellent flexible spaces.
  • Update the Kitchen – The kitchen is generally seen as the heart of the home. Having an updated area with plenty of storage space and a neutral décor will add to your value. You do not need to replace all the cupboards in your kitchen. However, adding different knobs can update the look without spending a lot of money. The same is true for lighting and appliances. Freshen up what you have and add value for pennies on the dollar.
  • Update the Bathroom – If your property has an older bathroom, consider modernising. You do not have to gut and redo the whole space to add value to your home. Brighten everything. Dark walls, sinks, tubs, or toilets make a bathroom seem small and even dingy. Add new lighting fixtures, mirrors, and tap wear for a fresher appearance and make sure the toilet, tub, and showerhead are pristine.
  • Revamp Your Floorplan – The open concept home is trendy and a comfortable way to maximise the space in your home. You do not need to pull the entire home apart. Eliminating a few walls can make a huge difference in your layout and the value of the property.
  • General Overhaul – If the property in question is in poor overall condition, overhauling the property may be your best bet. Taking a home that is a disaster and turning it into a dream will net almost immediate equity.

4. Choose Your Property Carefully

As with all major purchases, you want to look before you leap. Investigate all ‘sure things and hot tips’ exhaustively before signing on the dotted line. There may be significant reasons a particular property is available at a fantastic price.

Similarly, do not follow the crowd. If an area is a pricey hotspot, search for property adjacent to the popular site. You have a good shot at getting a good deal and making a good profit from adding the property portfolio.

Suburban homes.

5. Stay Aware of Rent Prices in the Area

While you certainly do not want to gouge your tenants, you may be cheating yourself if you are not sure of the going rate for similar units in the vicinity. If you employ a good property manager, this is something they can do on your behalf. Be sure to take the time to weigh your options regarding short term gains and long-term tenants before raising rents.

It is important to remember that investing, in all forms, comes with inherent risks. You need to make your decision based on facts and from those who are in a position you would like to be in down the road.

At Nest Realty, we understand that building a successful property portfolio can dictate how comfortably you will live, both now and in the future. That is why our team of professionals are here to assist you in making these vital decisions. If you would like advice about how to build a property portfolio or want a professional to look over what you have, feel free to contact us.

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