The key to building a multi-property investment portfolio

If achieving a successful multi-property investment portfolio were a simple feat, everyone would be a millionaire. But with a great deal of strategy, hard work, risk and time, you too can achieve property greatness.

Property Women member, Carmella Rowsthorne, currently owns seven properties throughout Australia, amassing a net worth of over $4.4 million. “To create a performing multi-property portfolio, you need a keen interest in investing and a passion to grow your financial future,†she says.

Here is Rowsthorne’s advice to help wannabe portfolio owners climb the property ladder.

Planning is key

Investors should first identify the reason they want to create a multi-property portfolio and their financial and lifestyle goals so they can work towards them. “Every portfolio must be to suit the individual person’s income and desired outcomes for the future,†says Rowsthorne. “It must be personalised to suit you.â€

Once you know what you want to achieve, research how to go about it. Attend seminars, examine trends and opportunities and speak to fellow investors for advice. Then, step forward into your invested future.

Choose the right suburb

Start creating your portfolio with a smart and secure investment choice. Select a growth suburb by investigating which areas have at least doubled over the past 10 years.

“Find the place where people want to live, that’s close to public transport, schools and shops and is also an up-and-coming area. Consider whether the local council is forward thinking and will invest in infrastructure,†she says.

Get the best property

Choosing the right property is one of the most important factors to a successful investment portfolio. Make sure the property is easily sellable and has a low chance of rental vacancy.

Here are some tips for choosing the right property:

• Buy properties under the median price so they have room to grow.
• Look for at least nine per cent capital growth and a rental yield of eight per cent per year to cover all property-related expenses.
• Make sure the average days on the market is under 30 days, as you want the property to sell.

Portfolio expansion

Once your first property starts performing, consider adding another and work towards creating a portfolio. “If you are in a financially secure position and comfortable with having more risk, then get another property,†she says.

Don’t worry too much about the size of your portfolio, she adds, but instead focus on the performance of your properties. “You might have four properties and they may give you the same result as 10. You just have to get the right properties.â€

Diversify

Create a long-term focused, diversified portfolio with properties in different locations – cities and regional areas – to spread the risk and performance scenarios. Rowsthorne also adds that buying properties in various states or territories will also alleviate land tax burdens.

People count

Get help from an experienced, independent financial advisor and accountant who specialise in property investment, and a trusted mortgage broker.

Develop relationships with buyer agents around the country to help you find the best deal possible.

Build a strong team of valued tradespeople to call on at short notice to fix property issues, and maintain a positive working relationship with your property managers.

Don’t be afraid to sell

Rowsthorne says it’s normal to make a few investment mistakes over the long-term – what’s important is recovering. “You can get rid of one bad investment and get another one that will go up. You can make up that money in next 12 months.â€

Align yourself with groups of like-minded people for support and access advice from people in the know.

“Successfully investing in a property portfolio takes time. You need to dedicate yourself to it for the long-term and constantly work at it so you know when it is the right time to buy and sell… It’s a part-time job.â€