How to build a property portfolio from scratch

Secure your finances

Before you start buying property, you need to understand your financial position. Start by checking your borrowing power. Lenders will look at your income, expenses, and credit history to decide how much you can borrow. It’s a good idea to pay down any high-interest debts before applying for a loan. Getting pre-approval from a bank can also give you confidence when making offers. If you already own a home, you might be able to use its equity to fund your first investment.

Start with your first investment property

Buying your first investment property is a big step, and choosing the right one can make a big difference.

• Start by picking a location that matches your goals.
• Next, think about the type of property. Units are often cheaper and easier to manage, while houses may offer more land and better growth. 
• You’ll also need to decide whether to buy new or established, each has its pros and cons.

It helps to work with professional like a buyer’s agent, especially if you’re unsure where to begin. They can guide you through the process and help you avoid costly mistakes.

Build and diversify your portfolio

Once you’ve bought your first investment property, the next step is to grow your portfolio.

Manage your portfolio effectively

You’ll need to keep track of rental income, expenses, and how each property is performing. Hiring a property manager can save you time and stress. They handle things like finding tenants, collecting rent, and organising repairs. You should also review your loans regularly. Refinancing can help you get a better interest rate or free up equity for your next purchase.

Common mistakes to avoid

Even experienced investors make mistakes and knowing what to avoid can save you time and money. 

• Borrowing too much can leave you exposed if interest rates rise or rental income drops. Always keep an emergency buffer for unexpected costs and avoid stretching your finances too thin.
• Another mistake is skipping proper research. Buying a property without understanding the local market, rental demand, or future growth potential can lead to poor results. 
• Property investment should be based on numbers, not feelings.

Your next steps in property investment

Building a property portfolio takes time, planning, and patience. Start with one property, learn from the experience, and build from there. Use tools and advice to guide your decisions, and don’t be afraid to ask for help. If you’re ready to take the next step in property investment, our home loan experts can help.