Why it’s the perfect time to realign your regional portfolio
If you’ve been considering parting with a regional property, but you’re worried certain factors might make it a hard...
One of the questions I get asked regularly is if I had the chance to start again knowing what I know now, what would I do differently?
Blogger: Cam McLellan, director, OpenCorp
The obvious answer to this is raise $10 million! But I want this to be a blog about building a portfolio the standard way, so will look at how I would start again if I just had the standard income of a normal household.
So let's assume I’ve gone back to being 20 years old and am staring down the barrel of 45 years in the workforce. Scary. What am I going to do? How do I start? For me this is answered quite simply, as soon as I could I would buy an investment property.
First, I would find the right property to buy, focusing on where I thought had a good chance for growth in the short to medium term (one to two years), with a view that every eight to 10 years property doubles in value.
In the long term (five years) I'm going to get some growth from this property. This growth will help me to buy my second property around the two-year mark. Two years after that I’d purchase two more properties, then a couple of years after that three more, then by year 10, guess what, guys? I'm living the high life.
Building my portfolio in this basic way means I'd be wealthy in 10 years by taking little baby steps, not taking big risks. It’s about picking the right properties in the right areas and making sure they appeal to tenants. It's not exciting, it's like watching grass grow, but it's a proven strategy.
A lot of people get caught up in becoming wealthy quickly; they get so excited once they make a little bit of money that they will go off on different tangents, doing different things. This safer strategy, even though it is as boring as watching grass grow, is the exact one that I use myself and that I’ve used since I started. As a colleague of mine says, it's like Grandma's spaghetti sauce: you don't mess with the recipe, just follow and repeat.
I guess what I’m really saying is, apart from buying my first property earlier – I wouldn’t do anything differently!