With property values being as high as they are, it can be challenging for young buyers to enter the homeownership space, let alone to consider the possibilities of building a property investment portfolio within their lifetime.
Although it may be a daunting goal, Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa says that it is achievable for those who put in the work to develop a plan and have the tenacity to stick to it. “Building a property portfolio will take careful planning and strategic financial management. For most, it will most likely also require some sacrifices in lifestyle and some diligent saving habits. If you are serious about turning this dream into a reality, then set up appointments with industry experts, including a financial planner and a real estate professional, to start working out an action plan that you can follow,” Goslett recommends.
Although the path towards achieving this goal will look different for each individual, RE/MAX of Southern Africa shares a few golden nuggets of wisdom that could help any young property investor start on their journey towards becoming a property mogul…
- The key is to start small. Begin with lower-cost properties to minimise risk and gain experience. Focus on up-and-coming areas with potential for appreciation rather than established, expensive markets. Affording your first property will always be the most challenging. Thereafter – because of house price appreciation and the home’s ability to generate income – each property you add to your portfolio becomes just a little easier to afford than the one before.
- To be a successful real estate investor, you need to be there at the right time, right place. This is where developing a close working relationship with a reliable real estate professional is crucial. As the local expert, real estate professionals are able to share market insights and trends which can help investors spot the right opportunities that will suit their risk appetite and budget.
- Part of being successful is the ability to act when the right opportunity arises. This means working out in advance how to finance your next property purchase. There are several ways to afford this. For example, you could use the equity from your existing properties to finance new purchases; you could team up with friends, family, or other investors to pool resources; or you revert to traditional home finance if you can afford to do so. Work closely with a financial advisor to find out which option works best for you.
- As with any investment, diversification will help to minimise risks. It is better to invest across different geographic locations to mitigate suburb-specific downturns. It might also be prudent to invest in a mix of residential, commercial, and industrial properties to help spread risk across different sectors of the market.
“By following these tips and remaining disciplined in your approach, you can build a robust property portfolio that provides both income and growth potential over time,” Goslett concludes.
Writer: Kayla Ferguson
