Building your property portfolio
Whether you’re buying your first property or your tenth, it can still be a daunting task trying to crack into the market. We’ve got all the tips you need to build a wealthy portfolio in the long-term.
More specifically, be strategic and patient. If you have a property or are planning on buying one you want to hang onto long-term, don’t worry about what the media – or even your friends – are saying about short-term fluctuations. If you own property already, and you can afford to service and keep it, you’re adding value to both the home and your portfolio in the long run.
Make a plan
You might want to think more short-term, like 12 months, or maybe go for the long stretch of anywhere from ten to 20 years.
Start by reviewing where you’re currently at and where you’d like to be at the end of your allotted time period. Not everything will go according to plan but thinking long-term may help you enter the market at a “low point”, to buy a property you wanted 15 years ago, at a slightly lower price. Since property markets are more cyclical than they are linear, you may want to consider markets outside of inner cities. These are the ones less likely to decline as hard or even at all in future.
Make changes now
Don’t be tempted to create a plan and then think, “I can afford to be lax with my spending a few more months.” Take a long, hard look at your savings, equity, cash and budget right now. Where can you afford to tighten your belt? Where should you tighten your belt? It could be the little things that make the difference, like swapping to a cheaper phone plan. This allows you to build up a buffer, so if a worst-case scenario happens, it won’t stop you from sticking to your plan.
Listen to the experts, not the crowd
To paraphrase Warren Buffet, buy when others are fearful and sell when others are greedy. Educate yourself rather than listening too closely to the media. Following updates from trusted sources like CoreLogic and other market analysts will help you understand patterns in markets. Remember that Australia is not one whole property market, and that how one city is performing is not indicative of how another’s market is doing.
Buy for the long-term
First you plan for the long-term, then you buy for it. You don’t need to go out of your budget and buy a four-bedroom family home if you’re currently single. Identify a long-term outcome you want to achieve, and buy a home that fits your criteria with great potential when prices are reasonable.
Even if you’re starting with a 12-month plan, aiming to accumulate assets when you can afford them and holding them for the long-term, will lessen the effect any inevitable ups and downs of the property market have on you.READ MORE
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