Growing your portfolio

Having lots of properties in your portfolio is the best way to turn a profit. With tighter credit rules and lower capital growth it’s now harder to do that.

For people on a lower income the first roadblock is how much money you’ve got coming in.  If more than 50% of your income is from rentals and you don’t have a lot of equity in them, banks see you as a pretty risky prospect.  This means that if you’re a young investor with a lower income you’ll be limited to 3-5 properties at first.

Get rid of non-standard properties.

These are apartments of less than 45sqm and properties with more than 3 incomes. Get rid of them, even if they’re cheap and give you good rents; banks will typically only lend up to 70% of their value, so they’ll hold you back from borrowing what you need.

Work towards strong capital growth

Don’t rely on the market to push the value of your properties up. You need to add value to your properties so you have more equity to borrow against.

Chose equity over rent

Sacrificing higher rents in the short term can be a hard decision, but it’s much smarter to invest in a lower quality property where you can own more equity.

Get rid of the dead wood

No point owning properties for the sake of it. Identify the properties that aren’t growing in value, and not making you enough money, and sell them quick.