How Do I Build a Balanced Property Portfolio?
Each investor will need to take a slightly different path to reach the portfolio goal of positive cash-flows and long-term capital growth. And it will take time, as property is a long-term investment strategy.
The steps to build a property portfolio really depend on four factors: your income, your expenses, your wealth target, and the time you have to reach it.
1. Start With Your Goal and Work Backwards
You have to start with a goal so you have something to aim for. This will make sure that your property strategy is focused and will give you something to refer to when you need to make hard decisions. This goal could be a passive income of P2,000 a week or P100,000 a month by the time you retire.
2. Focus on Income First
There is a wide variety of properties and locations all at different price points. Property investors need enough savings to pay a deposit and enough income to pay the monthly repayments on their home loan.
This means that those attempting to build a property portfolio either need to wait until they earn enough money to cover the rental losses on low-yielding, high capital-growth properties. Or, the other option is to only buy highyielding, low-capital growth properties initially so that they produce the income needed to cover expenses.