Build a Profitable Portfolio
If you've made good money out of your first property investment and you're ready to try another - or even if your own residential house has shown strong equity growth and you're keen to see if you can replicate this with a second property - then you'll need an investment strategy to make sure you get the best return on your investment. Here's out top 5 tips for building a profitable property portfolio:
Set a sensible investment strategy and stick to it throughout all the minor fluctuations in the market
Don't be tempted to throw every penny you have into property investment in January after spending an hour at a free property-investment seminar, only to ditch your portfolio in February when a newspaper-article scaremongers of crashes and negative equity. Know what your goal is and work towards it steadily.
Buy a spread of property to match your risk-profile
Aim for a range of houses and apartments, and select sites in different areas so as to take advantage of the most profitable shifts in local markets.
Take advantage of specialist financing
The buy-to-let mortgages offered on the open market are rarely the most competitive on offer . Working with a specialist broker means you'll get access to the best deals and help structuring your financing in the most tax-efficient way.
Manage your property portfolio efficiently
Which means working with the best letting agent in the area to secure good tenants and minimise void periods and employing reliable and efficient maintenance contractors - remember that a fantastic investment property on paper can quickly become a financial liability if it's allowed to stand empty for months or falls prey to bad tenants.
Revisit your investment portfolio on a regular basis
Check that your money is still invested in the best areas as the 'hotspots' of the 1990s can quickly become the distinctly-tepid spots of today! BUT don't be tempted to buy-and-sell investment property too quickly or else your acquisition and disposal costs (normally around 5% of the value of the property) will erode your profits. As a rule-of-thumb, a sensible property purchase should be a valuable part of your portfolio for at least five years.