Australians are becoming wealthier – and it’s thanks to property
Wealth per capita is now sitting at a record high of $522,032, thanks to record-high property prices. ...
Damian Collins, Managing Director at Momentum Wealth
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.