How Many Investment Properties Do I Need?
As helpful as it would be to have a definitive answer to this burning question, there unfortunately isn’t one cut and dry answer.
If you’re looking to build long term wealth in Australia, investment properties are the perfect way. The long term goal with investment properties generally is to earn money in 2 separate ways: Rent and property value increases.
If you’re looking to add investment properties to your long term wealth building strategy but you’re wondering how many investment properties you need to yield results, this blog post is for you.
Just about everyone has an opinion on how many investment properties you need to make investing worthwhile, and having a “the more the better” mentality is a common thought process in the investment property space.
Rather than subscribing to the idea that investment properties are purely a numbers game we encourage potential investors to focus on the quality of their investment properties rather than the quantity of them.
Whilst it may seem best to focus on getting your hands on a number of investment properties might seem like a good goal to focus on, prioritising the quality of your investment properties might just be a better focus.
What to keep in mind when investing in property:
When you’re looking to invest in property you need to remember that it is very different to buying a property to live in. When it comes to investing, you don’t always want to get the best ‘deal’ but you instead might want to focus on whether or not the property you are purchasing will make a good investment.
What makes properties a good investment?
There are a couple of factors you’ll want to keep in mind when shopping around for an investment property to ensure that the property you purchase is a quality investment that will benefit your portfolio.
Rental Income
This is one of the number one most important factors you’ll want to keep in mind when looking for a quality investment property. A quality investment property can make just as much revenue as a number of not so great investment properties. You’ll want to keep the overall rental yield in mind if you’re aiming to make a living from your investment properties.
Who do you want to live there?
This is a question that might influence the location you choose to look for an investment property in. Think about the type of person you want to live in your property and aim to find a home in a location that is highly sought after.
Think about investment properties that are close to schools or public transport if you’re looking to rent your home out to a family or consider looking for a 2-bedroom apartment close to the city if your ideal tenant is a working couple with no kids.
What will your ongoing costs look like?
When you’re wanting to build wealth from your investment property, you’ll want to keep in mind the ongoing costs that it will take to keep up with your property. These costs can include maintenance, emergency repairs and insurance. When investing in a quality property you’ll want an investment that has lower costs so you can maximise your overall return.
Quality Over Quantity
If you’re wanting to build wealth and improve your investment property portfolio, investing in quality, investment-grade properties is crucial in putting you on track to achieving your investment goals and securing your financial future. Factors such as location, capital growth, rental yield, population, amenities, property type etc. will make all the difference to the success of your property portfolio and must be heavily considered during the investment journey.
Contact our experienced team at AllianceCorp to chat to us about how property can play a key role in building your financial future.