Have you always wanted to talk about your “real estate portfolio” but felt as though it was just one dream too far? In reality, there’s little stopping you from building up your dream of a working real estate portfolio if you take the right steps, put in the time and hard work, and maintain a tough and determined attitude. If you can handle the hard work and determination, then hopefully our list of tips below can help you with the steps to take. 

You Have to Start Small and Local

In the vast majority of cases, large real estate portfolios do not spring into existence with the signing of a few documents and a single sweeping simultaneous purchase of properties. Most people start local, usually right in their own neighbourhood. Your first property that you own is most likely the one that you live in now. You might look to buy nearby homes that could rent out to other people. 

Starting small starts to generate cash that you can use to underwrite your investments and lay a proper foundation. It also establishes a track record of purchasing, renting and flipping or selling. That track record is what you need especially to help you with the next step. 

Explore All Finance Options

Don’t think that the bank is your only option when it comes to financing new property purchases and related investments. If you’re in Victoria, for example, you can find tailored finance solutions for investors in Melbourne that will help you get where you want to be in ways you perhaps never previously imagined possible. 

If you’ve taken your time with small, prudent local investments in property that are yielding results, then your finance options will be greater and more varied. Lenders are keen to back people with a track record, and who can demonstrate a good level of caution and good sense when it comes dealing in property. 

Don’t Be Too Hasty to Jump Into Different Markets

Success in a local market can quickly go to one’s head, and can push people to start looking into surrounding towns and cities where they think they can directly emulate the local successes they’ve had. Just remember that a successful formula in your home base won’t necessarily work again when you try in another market. 

One of the reasons that people can get off to a good start by starting small and local is that they know and understand their area well. The further away you stray from that, the less familiar you really are with market conditions, and that can cost you dearly. Research all new markets in depth before making any commitments. 

Follow the 1-Percent Rule

Another good rule of thumb when you’re looking at real estate investments is to follow the so-called 1-percent rule, which refers to the idea that the potential monthly rent income on a property you’re interested in should be at least 1 percent of the total purchase price. Equal to 1 percent is acceptable, but it shouldn’t be any less. That 1 percent also applies to the size of the mortgage. 

So, if you were looking at a property worth $200,000, you wouldn’t want your mortgage to be more than $2,000 a month, and you’d want any monthly rent you charged on it to be at least $2,000. It helps you to plan out expenses and see over time how your investments can bring in money. 

Don’t Run Before You Can Walk

Finally, it’s important that you stick to investment levels that you can handle in your current portfolio, and that you don’t make leaps that are too large to handle if and when something were to go wrong. In other words, don’t run before you can walk