Many people dream of investing in property and when considering the long-term investment potential, it is easy to understand the appeal. However, when first dipping your toe into property investment, it can seem daunting. From buying that initial property to building a successful portfolio, each investment must be careful considered and researched.
To help you on your journey, here is how to build a successful commercial property portfolio.
Before diving into the world of commercial property, you need to plan. Building a successful portfolio takes time, money, research and a lot of patience, so treat your investments as a business. It may even be a good idea to write a business plan to help you stay on track.
Buying your first property can make or break your chance of success. It can be tempting to opt for a large investment, but when starting out it is best to stay small as this will reduce risk. When looking for your first commercial property, aim to purchase small and locally, as a good initial investment will provide a strong foundation from which you can build.
Every property mogul wants to buy a property low and sell high, allowing them to expand their portfolio. The easiest way to do this is offer a low price. When you start out, you may be worried about offering a price that is too low. However, having an offer turned down is better than investing too much money and not seeing a good return.
Calculate Rental Income
When considering making any kind of property investment, it is crucial that you first do the maths. What is the property's rental value? Will it cover your mortgage payments? And will the property offer a high rental yield?
Knowing your figures and keeping track of your cash flow will allow you to make smarter investments and result in quicker portfolio growth.
Work With Professionals
When investing in property, it always helps to be kept in the loop. By forging strong relationships with local estate agents, you can make sure you are one of the first to hear about new investment opportunities. Choose an expert commercial property agent, like GVA Worldwide, who can help you build your portfolio.
Keep Tenants Happy
You may hope to buy, renovate and sell for a quick profit, but if you are looking for long-term investments, tenants are essential to your success. Ensuring tenants are satisfied will help to increase length of tenancy, reducing the amount of time your property is left vacant and minimising rental loss. Remember: good property management can boost your cash flow and create more investment opportunities.
When to Buy
The property market is constantly changing and it is important that you are able to spot these trends. Keeping an eye on market cycles means that you can invest and sell at the right time, ensuring your portfolio is as lucrative as possible. It will also help you to pinpoint up and coming areas that could provide a high return on investment.
Building a property portfolio can be challenging, but if you are prepared to invest the time required to thoroughly research your investments, work with your tenants and know the market, it can prove to be very lucrative. Aim to start out small and build slowly to ensure that your portfolio remains stable.