Whether you’re a seasoned property enthusiast or stepping into the realm of portfolio building, the pursuit of acquiring multiple investment properties is a dynamic and challenging endeavour.
From tapping into home equity to navigating the labyrinth of lenders, here are five savvy tips to navigate the journey of constructing a resilient investment portfolio.
1. Unleashing Home Equity Potential
For homeowners who have had a mortgage for some time, equity in that home loan could unlock the door to additional investment properties.
While low-deposit and no-deposit investment loans are viable, possessing equity in an existing property elevates your credibility in the lending landscape.
If this sounds like you, explore avenues like a home equity loan or a cash-out refinance. This influx of funds can propel the growth of your property portfolio.
2. Amplifying Savings
Alternatively, building a savings nest for a deposit adds a layer of security and also broadens your financial horizons.
To expedite your savings, consider:
- Reinvesting rental income,
- Cultivating positive cash flow, or
- Venturing into side hustles
3. Empowering Borrowing Capacity
Efficiently managing debts is pivotal for boosting your borrowing power. Trim short-term debts, avoid new credit inquiries, and streamline your expenses.
Scrutinize non-essential costs; cutting them can significantly augment your borrowing capacity.
4. Picking the Perfect Lender
While loyalty to your home loan provider might seem appealing, exploring different lenders can unlock doors to better deals and expanded borrowing capacity.
Weigh the pros and cons of sticking with one lender versus diversifying across multiple.
Beware of potential pitfalls like cross-collateralisation, which can limit flexibility and expose you to risks.
5. Strategic Property Pursuit
Diversifying your portfolio with multiple properties doesn’t necessarily mean pursuing high-value assets.
Consider broadening your holdings with more affordable properties, uncovering hidden gems in emerging suburbs, or targeting areas in the nascent stages of the property cycle.
Timing is crucial; sidestep purchases at the peak of a boom and focus on locales with enduring growth potential.
6. Delving into Loan Structures
Properly structuring your investment loans is pivotal for sustained success. Engaging with a knowledgeable property investment advisor and mortgage broker to help set up this structure is crucial.
Some strategies they may suggest include leveraging offset accounts to manage holding costs effectively. Choosing between fixed and variable interest rates based on your investment strategy and exploring split mortgage options for added flexibility.
Each investment strategy and journey are unique to your individual circumstances. So, ensuring you have the guidance and support of trusted professionals working for your best interest is key.
Growing your portfolio
Navigating the journey to acquiring multiple investment properties in Australia requires meticulous planning, financial acumen, and a profound understanding of the property market.
By tapping into home equity, optimising savings, managing debts judiciously, and exploring diverse lending options, you can construct a resilient property portfolio.
Remember, each investment decision should harmonise with your unique financial goals and risk tolerance. Collaborating with Hendrix & Hart can provide personalised guidance, empowering you to make informed choices on your path to property investment triumph.
The information provided in this blog is intended for educational purposes and does not take individual circumstances into consideration. For personalised advice and information, please contact us directly.
