Last week, we talked about the strategy to build your property portfolio via acquiring cash flow properties and its upsides and downsides. In this week’s post, we will look at the opposite side of cash flow properties, namely growth properties.
These are properties with a higher capital growth profile of 7 – 10% (and occasionally over 12% for a short period) and a lower rental return of 3 – 5% rent (occasionally even below 2.5%).
You have probably heard that there are generally two types of residential property investment strategies:
This is where investor puts in a standard amount of effort and therefore the investment has a standard risk profile and standard return. They also typically require a normal deposit (5% – 20%) and normal finance (95% – 80%), they receive natural capital growth (3%-10%) and a natural yield (2.5% – 8%). These types of strategies include:
After setting your goal and assembling your dream team for property investment, it’s now “shopping” time!
Different people prefer different property investment strategies depending on their knowledge, attitude to risk and how much they want to be involved.
If you are medium to high income earner who wants to create passive wealth quickly while reducing your risk as much as possible then I believe the best strategy is to buy properties with the following characteristics :
Last week, we talked about the importance of having a clear goal and forming a game plan to build wealth. Now it’s time to think about getting help to execute that plan to achieve your ultimate goal of financial security.
When starting to build my property portfolio, I knew that I would need help, a lot of it from various people.I wanted to find industry professionals who have education and skills that are above my own capabilities for all positions I hire for, effectively making me the dumbest person in the room.
So, why is team management so important for property investors?