Menu Search

Building a property portfolio which will lead you to early retirement

October 24th 2019
By: Lauristons
Building a property portfolio which will lead you to early retirement

“There are many ways to skin a cat” an old phrase goes, and the same is true when it comes to investing and making a fortune from real estate.

Property investment is among the best ways in which you can secure your future’s financial freedom and enjoy an early retirement.

There are a number of real estate investment strategies that one can apply. These strategies work for different investors, and different investors prefer different methods of investing.

We are going to outline some of the strategies which you; as an aspiring property investor can venture into to achieve your finanical freedom, enjoying a secure and early retirement. Read on!

  • Positive Cash Flow Properties

In this plan, you purchase the properties, and from day one, they bring in more money in terms of rental income than the money you are paying out in expenses. Immediately you feel the benefit, and within a short space of time, you will have a steady passive income and will be one step closer to retirement.

In the event your rent fails to increase with time, you are still in a position where you can retire by acquiring more positive cash flow properties. Within time, your motgage is paid off, and you reap the monthly benefits.

  • Buy And Hold For Rental Income

This strategy is almost similar to the positive cash flow property strategy. But, in this strategy, when buying the properties, they are negatively geared and may cost you good money. You simply do this in order to secure a great property with great potential capital gains in the future.

You patiently wait for the rental income to grow which eventually covers for all the mortgage expenses; rendering your properties as “positively cash flowed”. After some time, you may leverage your assets and invest in more real estate properties; growing your portfolio, with the primary goal being to live off the rental income.

In many instances, people using this strategy often sell some of their properties, to pay off the debt on their remaining properties, and afterwards live off the cash flow.

  • Buy And Hold For Capital Gains

Using this strategy, you buy the properties purely for capital gains. Yes, you rent or lease out your homes/properties, but they may still cost you a little money each month.

The goal is to patiently wait for the properties value to go up every 7-11 years. Once you have bought enough properties, and have patiently waited for their value to grow, you can live off the equity. Your already acquired properties will continuously increase in value, placing you in a better financial position.

  • Buy, Renovate and Sell

Just as it sounds - it's simple. You buy a given property, renovate; to the latest trends and features, then sell them out at a higher price. You may take some years with the property before or even after renovating, where you could still be earning from them through letting them out, while they still appreciate in their value, and then you could sell them after a few years. By this time, you will have earned from the rental income and from the new market price- minus the purchase and renovation costs.

  • Commercial Property

This is the best strategy to achieve capital gain and positive cash flow.

However, it requires a relatively high deposit – 30% of the properties total value, but it usually offers great rental yields. Also, any additional expenses such as utility bills and maintenance fees are usually taken care of by the renter. This means that your expense costs are lower, increasing your cash flow further.

Other property investment strategies that you may consider using to build up your property portfolio include;

  • Vendor financing sales
  • Buy, add value, then hold
  • Maximising on the leverage
  • Property options
  • Subdivision
  • Buy, hold, sell, and the list is endless.

In simple terms, there are dozens of real estate property investment strategies you can use; securing your future and leading you to an earlier retirement. Need advise knowing what option is perfect for you? Ask our experienced staff today who can help you with your property portfolio.