How to build a property portfolio

When learning how to build a property portfolio, numerous factors can help an investor stand out from the rest of the industry as you continue to grow a credible and successful reputation. In this article, we discuss some of the most important considerations for investors.

Listen to advisors

The best way to learn is to gain experience from those who have already achieved the goals you plan on setting for yourself, but taking the time to seek advice, listen and learn can save many unexpected and costly mistakes. Investors, letting agents, or property investment advisors, such as the team here at Knight Knox, can all provide valuable advice before making any big decisions.

Find the right moment

Any investment can increase or decrease in value depending on what is happening in the market. A good investor will know what is happening right now and what might come along in the future, holding on during tough times regardless of how investments look in the present.

While no one can truly predict what will happen in the industry, many elements can highlight the possibilities, such as previous trends or what is going on in the local area and nationally. Planning and developing a 12-month to five or ten-year strategy encourages investors to get ahead of the game.

Invest regionally

The most attractive benefit of buy to let is that location doesn’t matter. Looking at more regional areas can offer the best return on investment, allowing investors to build a valuable portfolio by building a solid foundation to begin with.

Find the right deal

Always buy residential properties below market value to increase your chances of making a regular profit and increase ROI through capital gains. While finding the perfect property below market value can take time, patience is key to building a good property portfolio and can dramatically increase in value if you pick wisely.

It’s important to consider switching strategies depending on the type of properties you want to invest in. For example, there is not usually a markup on PBSA, even once it’s been built, due to you having to re-sell it with it is student planning in place and the restrictions it brings – therefore buying below market value isn’t always an option.

Specialise or diversify?

Specialising in one type of property allows you to develop your knowledge in one specific area, preventing risks and mistakes. However, it could limit exciting opportunities and cause concern should that type of property lose value in the market.

For example, student property is the ideal investment for many, but having five of them during the pandemic would have been difficult to see good returns, whereas one or two mixed with other residential properties would encourage a healthy balance.

Diversifying spreads the risk to a variety of different areas and has the potential to add excitement to a portfolio. However, managing a range of diverse properties can increase your workload, so it is worth working with a trusted lettings agency, such as Knight Knox, to help manage your portfolio most effectively.

Specialising and diversifying both have advantages and disadvantages depending on the market, but doing your research can help to minimise any damage. The choice lies with the level of experience and the expectation of risks.

Build your portfolio with Knight Knox

Any successful investor recognises the importance of knowing how to build a property portfolio and how it can add value. Our expert team provides specialist knowledge in buy to let investment, and we can assist you throughout the purchase process and more. Get in touch with us today to learn more about building your property portfolio.