Get the knowledge, get the keys.

Get the knowledge, get the keys.

Diversifying Your Property Portfolio

Share on facebook
Facebook
Share on pinterest
Pinterest
Share on twitter
Twitter
Share on linkedin
LinkedIn

Don’t put all your eggs in one basket

To avoid this old pitfall, diversifying your property portfolio is the best and most recommended solution. There are a few different ways you can go about diversifying your property investments, such as: location, pricing and building classification. Diversifying your properties in these three ways can help to reduce your risks and structure your investments so they are as beneficial to you as possible.

Variation of investment location

You will want to avoid purchasing all of your property investments within one suburb or area. This is so that, if that suburb undergoes any major infrastructure changes that negatively impact the area – such as road changes, the shutdown or move of any major businesses, etc. – you avoid having all of your investments impacted. If you spread out your investments across the Gold Coast, and even invest in Brisbane or other parts of Australia, you are essentially lessening your risk.

Invest in different property price points

When looking to diversify your property investments, you need to also look at purchasing property within different price points, especially if you want to free up equity. For example: you have $1,000,000 to spend on property investments. If you purchase one property for $700,000 and another for $300,000, you have the option available to you to sell the $300,000 property in order to free up the equity while continuing to accrue income in your other property investment. Again, this has reduced your risk as well as opened yourself up to more purchasing possibilities and potential benefits.

Diversify the classification of your properties

That is to say, purchase different types of property. Don’t simply purchase residential property – should you have the expertise – consider also investing in commercial or industrial property. Even within residential property, should you feel most comfortable investing in this area, consider alternative types, such as: units/apartments, townhouses and homes.

The fundamental rule of property investment diversification

Quality over quantity. Diversifying is important in reducing investment risk, but you want to make sure you are buying valuable properties that are going to appreciate in value. Simply purchasing a whole bunch of cheap properties, generally is not as beneficial as purchasing one or two quality investments.

0/5 (0 Reviews)

Share this post

Share on facebook
Facebook
Share on pinterest
Pinterest
Share on twitter
Twitter
Share on linkedin
LinkedIn

Latest Articles

Leave a Comment

Your email address will not be published. Required fields are marked *

Continue Reading

Topics

Stay Informed

Subscribe to our mailing list for the latest updates and breaking news in Australian property.

Scroll to Top

Subscribe

Subscribe for the latest updates and breaking news in Australian Property