What exactly is a property portfolio and what are the benefits of building a property portfolio
for yourself? That's what I'm going to be covering in today's episode.
Hi, I am Ryan from onproperty.com.au, your daily dose of property education and inspiration.
Every single day it 8p.m., we release a new video, podcast and blog posts about investing
in property. You can check them out by going to onproperty.co.au. So what is a property
portfolio? A property portfolio is a collection of property investments owned by an individual,
a group or a company. There are many benefits to owning a property portfolio as opposed
to either owning no properties or owning just one investment property.
The first benefit is that it's very hard to achieve financial freedom on just one investment
property even though only one investment property is a great step and makes you less reliant
on the pension or less reliant on your super. Purchasing just one property is unlikely to
allow you to achieve that real financial freedom that you want, whether that be early retirement
or whether that be significant amounts of wealth, but owning multiple investment properties
with multiple rental incomes and multiple opportunities for growth can really set you
up financially.
Another great thing about having a property portfolio is the ability to diversify in order
to grow your portfolio faster. If you invest in just one property or even if you invest
in two or three properties in the same area and that area doesn't grow for five years,
well then, you don't have any equity to go ahead and invest in more properties, but if
you have three different properties all scattered throughout different areas even if two of
those areas don't grow, but one of them does, it's likely that you'll be able to access
equity from that property that grows and will be able to buy a fourth property and you can
then continue to grow your property portfolio faster. So having all of your eggs in one
basket, all the properties in one area can limit how fast you get back growth.
Another major benefit of having a property portfolio is access to equity. When properties
go up in value, there is often the opportunity to borrow against that increased value, to
either reinvest into more properties or even in some cases to fund your lifestyle. Overtime,
rents tend to go up, so another benefit over property portfolio is the fact that you have
multiple properties with multiple rents going up. Your major expense which is your mortgage
tends to stay about the same apart from fluctuating interest rates, but as rental income goes
up that means you got more income while your major expense your mortgage stays relatively
the same. This leads to more passive income for you, and the more properties you have
well the more potential passive income there is.
And the last benefit that I am going to share with you today is a property portfolio gives
you multiple streams of income. If you own just one investment property and that is not
tenanted, if it goes vacant for sometime you aren't getting this much rental income which
is absolutely zero, because no one is renting it, but if you have five properties or ten
properties and just one of them isn't rented, but the rest are, well you still got cash
flow coming in, you don't have all your cash flow but it�s definitely not 0%, so by diversifying,
by having multiple properties means that you get the benefits of multiple rent increases
and you also get the cash flow benefits of the fact that when one property is vacant,
you still have cash flow coming in, so as you can see, there are a lot of different
benefits to our property portfolio.
I hope that this has explained exactly what it is and the benefits of it and has encouraged
you to consider building a property portfolio of your own. If you want advanced training
modules on how to find positive cash flow property or if you want online tools that
you can use to analyze potential properties so you know what you're jumping into, then
check out On Property Plus which is our premium membership website, advanced training is in
there, where I teach you how to find positive cash flow properties; how to research an area;
I teach you basics, like what is positive cash flow property, how can you identify it;
we talk about budgeting; and then we got the right tools like the Advanced Property Calculate
where you can assess the potential cash flow of a property almost instantly under 10 seconds;
we've got things like the suburbs profile list, you can see population of areas and
stuff like that; we've also got listings of real positive cash flow properties that I
go out and find, so I'll list about five to ten properties per week that you can see and
you can use to open your eyes to exactly what positive cash flow properties are, where they
are and then you can take your search from there and it just makes finding positive cash
flow property so much easier. If you are interested in On Property Plus, check it out by going
to www.onproperty.com.au/plus.
So until tomorrow, remember that your long-term success is only achieved one day at a time.
I am Ryan McLane, I will see you guys tomorrow at 8:00pm.