Today we’re thinking about property investment and the possibility of building a property portfolio. If you’re already a landlord then this may not be too far from your mind either as it is a dream of many to finish the day job and become a full time property investor living off the profit from your property portfolio.
However, the reality of this happening is certainly difficult, but not impossible!
Of course with an everyday job you will have a steady income. Every month you will know how much money is coming in, and roughly how much is going out, which provides financial stability. If you decide that this is no longer for you, then you can be presented with a big challenge, a risky industry and financial difficulties, at least in the short term.
In terms of generating some profit, it is important to remember that you need to make an excess on your rental income above your mortgage repayments and costs. It is always important however to bear in mind the long term goals! A property portfolio is something you can hit the jackpot on in the long run rather than the short!
Further risks attached to property investment are credit risks. It’s important to have a decent amount of financial backing behind you along with strong credit ratings, however if you have been paying off your mortgage steadily then this is likely.
When building a property portfolio it is also important to bear in mind that the larger the portfolio gets, the cheaper certain things will become. For example, agency fees, property insurance, maintenance and management costs will all begin to reduce as your portfolio grows as the more work you offer to suppliers, the less they should charge. It is a similar idea to “buying in bulk”. This is something that a property investor can begin to take advantage of in order to make as many savings as possible!
Property investment can be tricky, but can ultimately lead to large profits in the long term. It’s always important to keep your eye on the goal, and make careful decisions every step of the way.