To build a strong property portfolio, diversification is the key to unlocking growth, increasing wealth and minimising risks.
Before we jump into our top tips for diversifying your portfolio, let’s start with the reasons WHY you should do this in the first place.
Diversifying your portfolio helps you:
Mitigate risks (like concentration risk) and increase stability by investing in various properties and locations.
Maximise returns by capturing growth opportunities in different real estate markets.
Ensure a steady income stream by diversifying income sources from various property types.
Create a pathway to long-term wealth building and financial well-being.
Here are our top tips to diversify your portfolio:
1. Define your investment objectives:
First things first, you need to have a clear vision of your investment goals.
Are you looking for short-term gains through property sales? Aiming to generate passive income from rentals? Or focusing on long-term appreciation for maximum capital gains?
How PropHero helps: Your journey at PropHero starts with an investment strategy session. We do a deep dive into all of the different investment strategies and help you decide which would be the best fit based on your individuals goals and financial situation.
2. Investing into different geographical locations:
Investing in properties across various states and cities can act as a shield against localised downturns, providing a stronger backbone for your investment portfolio. With fluctuating value and rental demand, a well-composed portfolio can withstand any storm that comes its way.
How PropHero helps: PropHero’s data, AI, and seasoned property experts scan over 15,000 suburbs in Australia to find the top 1% of investment areas in the country. We currently have 14 hotspots around the country that we’re investing in, providing you with a variety of investment opportunities to diversify your portfolio. Plus, we also offer a select number of investment opportunities globally, for investors that want to take diversifying their portfolio to the next level. Want to invest in Spain or Bali? You now can using PropHero!
3. Research, Research, Research:
In-depth analysis should be done before investing in any property. You need to assess the surroundings, neighborhood, location, and all potential risks.
How PropHero helps: PropHero has your back. Our expert property coaches conduct meticulous due diligence, pest and building inspections, and check for noise, flood, and bushfire risk to ensure your investment is low-risk and high-return.
4. Seek professional guidance:
Building a diversified portfolio and maintaining it may seem overwhelming, especially if you’re a first-time investor.
How PropHero helps: PropHero is here to guide you every step of the way when building and maintaining your diversified portfolio. We’re your property wealth partners for life and do 99% of the work for you so you can invest with confidence and ease.
5. Embrace + leverage technology:
In today’s era, different technologies are available to help you monitor your property performance, analyse market data, calculate rates, returns and more.
How PropHero helps: Our user-friendly app allows you to effortlessly monitor property performance and make data-driven decisions.
So, to sum it up, by strategically investing across various property types and locations to build a diversified property portfolio you not only maximises your income potential but also help minimise any potential risky surprises.
Ready to start your property journey or diversify your portfolio with PropHero? Click here to book a call with one of our experts.