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Simple Steps for Making an Effective Investment Portfolio

Written by Posted On Thursday, 23 November 2017 07:47

How can we make the most of our money when it comes to making an effective property investment portfolio? It’s an essential question that everyone must ask because it is our attitude towards risks and meeting financial goals that determines how we do this.

Property has always been looked upon as a medium-risk investment. Investing in property brings the opportunity to benefit from capital growth and earn a rental income, and you have the security of owning a tangible asset. So, in order to help you build a successful and effective property investment portfolio, here are some tips that you can follow. Let’s have a look.

#1 How are your finances and do you have a deposit?

It can be extremely difficult or even next to impossible to purchase property in Australia without a deposit, which must be around 5% of the purchase price of your property. So, it would be a good idea to start listing out all your assets, including your incomes. It is also a great time to work on your expenses to see where you can cut down on them. This way you will get an idea the amount of cash you have available to invest. However, just because you do not have enough assets, do not rush and reach the conclusion that you cannot afford to invest. The fact that you have a stable and reasonably good paying job (that is if you have one) accompanied with a good employment history also acts as a referral in getting a home loan.

#2 Start Budgeting

Budgeting is the second essential step, which can assist you in balancing your income and expenses efficiently. Doing so, will show you where you have been spending your money in turn helping you to make better plans for getting over bigger expenses down the line. So, before you start looking for a property, get your finances straight and you will have a great property investment portfolio that you can easily show off.

#3 Realise your goals

Do you know your actual goals and what you are trying to achieve in the long run? You need to paint the bigger picture and understand what success actually means for you. The main reason why property investors invest their money into property is to secure their financial future or to be free to do what they want, whenever they want to do it. So, to successfully achieve your goals, you must first get a clear picture of your visions. So, go ahead and set a deadline for yourself as to when you would like to achieve your your dreams and aspirations in reality and then start working on them.

#4 Get a pre-approval

Now that you are clear about what you want, you can take the next leap of faith and approach your lender for a loan pre-approval directly or you can also do so through your trusted mortgage broker. Talking to a mortgage broker melbourne before applying for a pre-approval can be a plus point especially if you’re not sure you’re financially ready to invest.

Applying for multiple pre-approvals is not a good idea. Each time you apply, the lender will check your credit record. If there are multiple inquiries, this sends a red flag to the lender and may refuse your application.

The best thing to do and avoid your home loan being rejected you should first find out the whether you qualify for a loan, and if not then why. It is also recommended to check your credit ratings time and again in case there are any defaults in it. Defaults are a sore to the lenders’ eyes and a major factor of rejection of home loans. Fix it as soon as you can stop applying for loans within short intervals of time. Other than that, to increase your credibility, try your debts or credit card limit

#5 Create a Purchase plan

A good purchase plan will help you facilitate your goals of growing your property investment portfolio to a point wherein it can produce the growth or income you have been expecting and aiming for so long. Your purchase plan should serve as a structure for you to stay in the property game. Make use of as many financial tools available in the market today to stay informed and make the right decisions. Knowing the market can be key to making the right investment choice.

Conclusion

It’s easy to get overwhelmed when you’re starting something new and as massive as property investing.

But don’t give up. Just imagine yourself in the next 10 years, if you buy the right properties now. You could just be someone who is happy in life, relaxed and sitting back, feeling secure secure and even proud that you bought properties that more than doubled their values today while your peers and everyone else wishes they had done what you did 10 years ago.

Building a property investment portfolio can be a daunting task, but it is not just for business gurus or finance broker. Follow the tips above and you will have the best property investment portfolio ever wished for.

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