Why do we need at least 4 properties to achieve real long-term wealth?

Despite the overwhelming potential that property investment represents, a staggering nine out of ten Australian families have yet to tap into this lucrative opportunity. For those who have already taken that bold leap and joined the mere 8% of Australians owning investment properties, congratulations on embarking on this life-changing journey.

The goal of most property investors is to create a portfolio of real estate that provides them with a consistent and reliable income stream, known as passive income, well into the future.

However, generating substantial passive income and achieving financial freedom often requires more than just one or two investment properties. Once you understand the power of a diversified portfolio, you will realise why 4 is a magic number when it comes to property.

Unlock the Power of Property Portfolio Diversification with 4+ Properties

A diversified portfolio is key for property investors as it allows returns to be optimised across the portfolio and minimises the risk of loss due to external factors. It also provides a more stable income stream over time, as investments can be spread across different types of properties in different locations.

Investing in real estate can yield significant returns, but it’s important to diversify your portfolio to reduce risk and maximise profits. A diversified real estate property portfolio could encompass various locations, property types, and purposes, such as build to rent versus renovation for sale. There are different methods you can use to achieve a diversified portfolio, such as borderless investing and rentvesting. With borderless investing, you can invest in properties across different states and regions, reducing your exposure to any one location or market.

Rentvesting  is a property investment strategy where someone chooses to live (and rent) where they love but buy (invest and rent out) where they can afford. This approach could see rentvestors taking out an investment loan and buying one or more investment properties first before potentially buying their dream home to live in.

The ‘4 investment properties in 6 years’ strategy involves carefully building a diversified property portfolio, to build long-term wealth creation and stability. This is an effective approach for those seeking to attain true financial freedom and live their retirement years in ultimate comfort.

By diversifying your investments, you set yourself up for success by targeting assets with varying degrees of price points, locations and rental yield. For instance, if you are looking for higher rental incomes, target multi-unit properties within capital city CBD’s. Whereas larger family homes in desirable suburbs generally provide higher price appreciation rates as well as strong rental incomes. By building a well-rounded property investment portfolio, you optimise the potential for both steady cash flow and robust capital growth.

‘At Ironfish, we know there are clear, strategic advantages of a diversified property investment portfolio targeting affordable properties of different types, spread across multiple cities. Our Portfolio Approach empowers investors to potentially reach their goals faster. Backed by the confidence of the latest research, with increased buying power interstate and VIP access to quality investment opportunities, we help our investors to buy and hold onto properties more easily long term. Our mission is to help you achieve financial security for your future; we’re in this together and we’re with you for the long term.’

Grant Ryan, Ironfish Property Director