What is a property portfolio?
A property portfolio is simply, a collection or properties purchased for the sole purpose of gaining profit. In terms of investing, there are a range of different ways people invest their money to grow capital.
Investment portfolios are more broad compared to property portfolios, as they include stocks, bonds, mutual funds and exchanged funds. A property portfolio, however, is only relating to having a range of different property investments.
Why build a property portfolio?
We have conversations with hundreds of Australians every week looking to learn about investing in property. And truly, there are all different kinds of property investors.
There are some that rentvest to invest, there are some buyers that really want to purchase in their own state, and then there are seriously experienced investors that are looking to grow a highly profitable portfolio so they can retire early.
In all of these cases, the goal is still the same: To generate a healthy cash flow.
The only difference between those that are experienced and those that aren’t, generally speaking, is that anyone that’s new to investing in property will want to invest in an area they are comfortable with.
This is the idea that if a buyer is more comfortable with an area, there will be less risk, less loss and less emotional distress.
This couldn’t be more wrong! Especially for buyers looking to invest in Melbourne and Sydney.
Seasoned investors that have built a profitable portfolio have invested in areas where they can get the lowest price, at the highest return. And generally speaking, these areas aren’t anywhere near Sydney or Melbourne.
So if you want healthy cash flow from a range of property investments, you’ll be looking to grow a profitable portfolio.
How to manage a property portfolio
There is one difference between investing in shares and property – and that’s the fact that properties are tangible, the purchasing process is more complex, and when you own an investment property, there is additional complexity from having tenants living in your investment.
Having a range of properties can be time consuming, and that’s why you’ll notice an increasing trend in property portfolio services and software.
When it comes to managing a property portfolio, there are a few different layers here.
- Managing the overall performance of the portfolio
- Managing transactions relating to the properties
- Valuations of each property
With so many solution providers out there, there are a range of different ways to manage these things and we’ll list a few tips below.
For savvy property investors though, the main thing is to ensure you understand and track your cash flows.
Having multiple properties can mean you suddenly incur additional expenses. So having a clear view on your cash flows is critical. You can track your cash flows for free in our app. Download it here.
If you don’t use an app, here are a few other ways you can manage your portfolio:
- Keeping a folder on your computer for each property with essential documents and spreadsheets
- Create and track your cash flows through a single master spreadsheet (not recommended though!)
- Using a booking keeping software tool like Xero or MYOB
- Pay all your bills and expenses through your rent
Where PropHero comes in
PropHero has changed the property investment game for the last two years. We use a proprietary data model that has outperformed the market by 170%, ensuring investors that use PropHero gain returns of at least 12% on average.
In terms of property this is massive. A 12% return on a $500,000 property is $60,000, and that’s the lower end of returns we see for clients. See more in our success stories here.
With PropHero, you’ll get access to:
- Licensed property coaches that build your investment strategy with you
- Off market deals that deliver high return
- Portfolio review sessions to ensure your investments are on track to helping you meet your financial goals
- The PropHero App – where you can manage capital growth, cash flows and rental income for all properties, in one place.
Ready to discuss how we can tailor your investment strategy to your unique budget and needs? Book in a free consultation with our team today.