podcast

Why investors get stuck and can't grow their portfolio

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 89: Renovating as a couple: two young investors share their story
Episode 88: Everything you want to know about the short-term rental market revealed
Episode 87: BONUS EPISODE: Former Olympian shares his property development know-how
Episode 86: How a former Olympian found new sport in property development: Ed Fernon's success story
Episode 85: Q&A session with Paul Glossop – more questions answered!
Episode 84: 'How I overcame dodgy builders to manufacture $100k in equity in less than a month'
Episode 83: BONUS EPISODE: Top Aussie broker’s tips for surviving changes to mortgage lending
Episode 82: The investment strategy that could allow this 32-year-old to retire TODAY
Episode 81: BONUS EPISODE: Secrets of the Perth market uncovered: invest now or wait?
Episode 80: Q&A session: SPI answers all your burning questions
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