How Many Properties Should I Invest In?

Ever wondered how property investment gurus build up a portfolio of property that gives them an enviable income and ongoing net worth? If you’ve ever dreamt of investing in property, owning multiple properties and having the financial freedom that rental income and capital growth can give you then you’ve probably wondered just how many you might be able to sensibly purchase and manage.

You might be surprised to find that the answer does not entirely depend on the level of your income or existing assets. According to property investment strategists, investors should focus on creating a long-term strategy that maximises their current worth, being financially prepared and organised, understanding their risk appetite and purchasing the right type of property (that is, buying an “investment grade” property). Even if it takes a while to save for a deposit for the first investment property, building up equity in that property – either through paying off the mortgage quickly or through capital growth – will help give you leverage when you purchase the next property and so on. Building equity over time will help to show the banks and other lenders that you are a serious investor who will be able to service loans in the future. That way there is really no limit to the number of investment properties you can plan to buy over a specific time frame.

Obviously owning multiple properties will require you to focus on managing your finances (and your cash flow in particular) to ensure you are not over extending yourself or have enough of a contingency fund to tide you over in the case of an unexpected event such as an extended vacancy in one of your properties or emergency repairs. It is always a good idea to talk to a professional financial advisor or accountant when considering a change in your finances.

How Do I Manage All Those Properties?

First time investors are often amazed at the time-consuming nature of property management, including having to deal with issues such as filling a vacant property, setting rent and rent reviews, emergency repairs and ongoing maintenance and dealing with strata issues. Imagine trying to deal with all these issues on a day-to-day basis if you had more than one investment property! Smart investors find a professional and reliable property management company for their first property investment, and then use them to manage all their subsequent properties they may purchase. Having this ongoing professional relationship provides them with peace of mind, and gives them the confidence to be able to purchase multiple properties knowing that they will be well managed.

Many successful investors get their property market research and assistance from professional property investment strategists. A company such as Ironfish has dedicated research teams and people “on the ground” that combine to form an unbeatable resource for your property investment needs.