Whether you're buying the first residential property in what you hope will become a small empire or just looking to diversify your portfolio, it's important to keep in mind that a diversified position is the right approach. Just like the stock market, you don't want to put too many of your eggs in one basket, and finding the properties that appeal to a number of different demographics will help you avoid vacancies and find financial success.
The question, then, is how you should approach your mission for a diversified, balanced residential property portfolio. First and foremost, you might want to consider buying properties in a number of different locales, mixing it up between suburban, urban and even rural areas so that you always have a source of income – and interest from renters, according to RealEstate.com.au. You might also want to think about properties you can use for short-term and long-term rentals.
Laying the groundwork
One thing that may be helpful to consider at this time is what your ultimate goal as an investor is. For instance, if you are looking to hit a specific income level through your investments (for instance, $100,000 per year), that will inform both the number and type of properties you seek to buy, and even the timeline you will need to acquire them all.
However, you will also be wise to simultaneously plan for the worst while hoping for the best, according to Domain. For instance, whether you're just starting out with one investment property or you already have a number of them, you need to understand that vacancies are part of the game, and you need to have a plan to cover your costs when homes sit empty – whether that's for one month or six.
What to focus on
Generally speaking, it's also a good idea to make sure the properties you buy are high-quality – and thus, likely to attract more interest – than buying a large number just to have as many streams of passive income as possible. That way, you're far less likely to deal with unhappy tenants and, as a result, turnover.
Whether you're buying the first property in what you intend to be a sizable portfolio or you're adding your fifth, having an expert real estate agent there to guide you is a must. At Ray White Surfers Paradise, we're equipped to help first-time buyers and experienced investors alike find the right deals that work for all their needs. Get in touch with us today to find out more about how we can help you.