No matter what year it is, growing a property investment portfolio begins and ends with long-term commitment and a healthy dose of determination. So what can today’s start-up investors do to get ahead?
No matter what year it is, growing a property investment portfolio begins and ends with long-term commitment and a healthy dose of determination. So what can today’s start-up investors do to get ahead?
Many of Cohen Handler’s clients are repeat investors, buying their second, third or even their 11th property from us to add to their portfolios. You might be surprised to know that a fair number of these investors are on modest salaries of around $55,000.
Those who first started with us in 2009 now have extensive portfolios and passive incomes of $100,000. While today’s market is different to what it was in the early 2000s, there are still many opportunities for young start-ups to get on the investment bandwagon. However, you cannot take the same approach that worked 10 years ago. You need to buy smarter and better, and most importantly ‘think fresh’. Property investment now and then
- Interest rates were higher
In 2004, lower prices on the surface made it seem like a ‘buyer’s paradise’. However, interest rates were very high so the cost of purchasing a property was still sizeable.
- The rental market was worse
In the noughties when property was cheap, there was also an oversupply problem, so it was not unusual to see a property sitting empty for months until a tenant was found. These days the vacancy rates of properties are much lower and more stable.
- Getting finance from the banks was easier
In the early years of this century, getting a loan was fairly straightforward, and many people were eligible for a loan with as much as a 90–100% loan-to-value ratio if needed. Now investors require a 20% deposit and banks are also making it more difficult to withdraw equity from property to borrow further.
- It’s important to lay a good foundation
Make sure you have at least three to five properties in the lower range of $350,000 to $500,000 so you are able to better manage your finances and the risk is divided. The next property should also be bite-sized and achievable.
- Location is still key
Cohen Handler encourages its investor clients to diversify their property purchases in regard to locations. Many have purchased in Southeast Queensland, where the entry level is very achievable and relative to inflation, resulting in properties that have performed very well.
One of the most important things an investor can do is adapt to change. This means following the markets closely and diligently and creating a well-read strategy to ensure that you are actually achieving an end goal when buying a property.
If you are interested in purchasing an investment property and growing a property portfolio, contact Cohen Handler now.
Ben Handler is co-founder and CEO of Cohen Handler – a buyer’s agency with over $3bn worth of properties purchased in nine years. He is also into learning, reading, and doing yoga and meditation to bring mindfulness to his professional life
This article first appeared in MPA's sister publication Your Investment Property
