podcast

Why investors get stuck and can't grow their portfolio

0

Damian Collins, Managing Director at Momentum Wealth

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Only a small proportion of property investors end up building multi-property portfolios, so what is holding a majority of investors back?

One of the biggest mistakes we often see with investors who are trying to grow their portfolio quickly is that they focus on yield. Now yield’s obviously very important, it helps the service and a lot of people start to hit that servicing wall when they get to the second or third properties. But why yield is very important, if you chase a dud property that's not going to grow in value for you then while you might be getting a slightly better yield, if it doesn't grow in value then you're not going to be able to generate that additional equity. So the better thing to do is look at the existing property portfolio that you've got and figure out ways to get better yields from that rather than chasing a high rental yield location in what might be a substandard growth area. In terms of other mistakes that investors make, some of them actually give up. They actually find that "Well, I've got a couple of properties, I've hit the wall". And they even sometimes end up thinking about selling some. So really property is a long term journey. While everyone wants to get rich quickly, you've really got to focus that it is a long term journey. Be prepared sometimes to sit for a couple of years if you can't get into the market but ultimately if you buy the right properties, in the right locations, you get the right tenants, you're going to do well and make a lot of money over the long term.

Listen to other instalments of The Smart Property Investment Show:
Episode 61: The ins and outs of strata: what buyers should consider
Episode 60: The pros of using a buyer's agent: why this investor brought someone in
Episode 59: How to invest in property as a team: two investors share their secrets
Episode 58: When do you stop investing? The SPI Show answers more listener questions
Episode 57: Wealth creation through property: trends and themes to think about in 2017
Episode 56: The SPI Show accountant reveals all: How to pick your financial team
Episode 55: The reluctant property investor: How necessity drove an 18-property portfolio
Episode 54: The SPI Show Q&A: Listener questions answered honestly
Episode 53: 6 properties in 2 years: how this investor is achieving his goals
Episode 52: Will property prices fall? When? And by how much? What investors need to know
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