Why investors get stuck and can't grow their portfolio
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:
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Episode 104: New podcast: Q&A session with Paul Glossop – more questions answered!
Episode 103: Special Episode: Phil and Munzurul talk steering the growth and development of portfolios by managing cash flow
Episode 102: Investor reveals how to find the perfect property manager
Episode 101: From 12 to 100 properties – how this investor will achieve his goals
Episode 100: Property investor talks research, teamwork and balance in his portfolio
Episode 99: Portfolio update: SPI opens its books to reveal all the nitty-gritty details
Episode 98: Buyer's agent forecasts what’s to come for Aussie property market
Episode 97: ‘How we achieved financial security through property’ – the Property Twins reveal all
Episode 96: Tips for tackling pest and building inspections head-on
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Why investors get stuck and can't grow their portfolio
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