Property investors often have a hard time formulating strategies that would work best for achieving their specific goals, but most of those who found success believe that “time resolves matters naturally” in property investment, as long as you make good purchases and manage your risks well.
Like many people in the business of creating wealth through property, Smart Property Investment’s Phil Tarrant has also had his fair share of mistakes throughout his six-year investment journey. However, instead of letting these missteps derail his journey, he has worked hard to further secure his portfolio from risks.
“We've put a lot of measures and checks and balances, and processes in place to give us [a] greater bandwidth to more effectively manage this portfolio and hopefully not make mistakes,” he said.
“Get the simple things right—it doesn't need to be hard. [Then] concentrate on the exciting stuff, the dollar-productive stuff, the things that most investors like working within that is steering the growth and development of their portfolio.”
Simply by striking a good balance between cash flow and growth, Phil and his team are confident that they are well on their way towards achieving their financial goals. Currently being at the acquisition phase, they are looking to grow the portfolio quickly by purchasing more properties, all while using their previous assets to increase the total value of the portfolio.
Now, the question many investors have is: How exactly do you strike that balance?
According to Phil’s accountant Munzurul Khan: “Time resolves many of the matters naturally by itself. How does time resolve so many of the matters by itself…? Over a period of time… simply, rent increases.”
“As the rent increases, you would see, naturally, your portfolio becomes a bit more… positive cash flow over a period of time—that's your natural progression. Along the way, we [can] bring in some of the constructive [changes, like a] granny flat,” he added.
Buying well and smart decision-making in terms of property modification is believed to be the perfect duo for a most productive property investment journey, as long as both are done the right way.
Munzurul encourages property investors to diversify their portfolio as much as they could — explore different markets as well as the variety of properties they can invest in—in order to spread their risks and maximize the opportunities for wealth creation.
Phil currently has eight properties in New South Wales, three properties in Queensland, and one property in Victoria.
“If we could, in the best of the world… balance all of those in between different estates, then what we do is that we pass the test of the time… If I look back into the cycle of the, say, the last 20 years, 30 years… not necessarily each estate grows at the same time at the same rate,” Munzurul said.
“In an ideal world, if we have a portfolio [with assets in] few different estates, then you ride the cycle of growth of each [area].”
Tune in to Phil Tarrant and Munzurul Khan’s episode on The Smart Property Investment Show to know how to avoid mistakes by getting the “simple things right,” how your accountant can help with the growth of your portfolio, and the best ways to reach your retirement goal.