Tips to Manage Large Property Portfolio

Many property investors start small, taking on only one property that they can manage alongside a day job. This single property may be taken on to subsidize existing income or to achieve a future financial goal, like funding retirement.

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Some investors, however, find that they enjoy the property game and decide to expand their portfolio to include multiple and varied assets. Usually, this involves cashing in the equity that’s been built up in an original investment property to raise the capital needed to fund the deposit on another.

Hola, we have listed a few points to help you grow the large Property portfolio:

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Diversify

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It often pays to spread the financial risk by investing in different geographical areas, different types of property, and different markets (e.g. student rental, private rental, commercial). This will ensure that you haven’t put all your eggs in one basket, should one part of the property market take a knock.

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Letting Agents

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There are typically two options when hiring a lettings agent: let only and full management. A let-only agreement is the cheaper option of the two and will see an agent advertising your property, finding tenants, and collecting the rent each month.

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A full management agreement will see the agent taking care of everything, from finding tenants and collecting rent to handling repairs and maintenance, chasing up unpaid rent, carrying out property inspections, and dealing with emergency situations, such as burglaries or burst pipes.

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Handing over a proportion of your investment return may seem painful at first, but the peace of mind afforded by the services of a good letting agent should not be underestimated, particularly if your properties are spread over a wide area.

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Paying letting agents take care of the day-to-day running of your property empire will also free you up to concentrate on strategic planning and financial management. It will also remove distractions, allowing you to fully focus on business development.

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Financial Advice

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As your portfolio grows, the finances of your operation will become more complex. For this reason, it may be prudent to invest in the services of a competent financial adviser, who can make sure that you have information about, and access to, the best borrowing deals.

Signing up with a good accountant like 365KPO will also ensure that you run your property portfolio along with sound business principles, helping you to handle issues like cash flow projection and rental yield calculations.

As the owner of multiple rental properties, it’s crucial that your financial records are accurate and up to date. A huge number of transactions will happen each month, with payments going in and out for rent, repairs, maintenance, and help with managing properties. Being experienced and trusted accountant 365KPO may be a great investment, particularly to help keep your tax returns under control!

As your portfolio expands, the strategy will also be more important than ever, as you will need to make  systematic,  targeted   purchases,  rather  than  impulsive   decisions.  A  team   of skilled accountants in 365KPO will also help you to track maintenance costs, which will increase exponentially alongside the number of properties you own.

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Buying in Bulk

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A great way to grow your property portfolio is to buy in bulk, particularly at auction, where groups of properties are often sold at great prices. Many auction properties need a fair amount of work, something which is off-putting to many buyers. If you’re prepared to put in some time and effort, however, you can pick up bargains that can be quickly turned into great rental earners, with the assistance of an experienced builder.

When viewing auction properties, it’s also a good idea to take that experienced builder along with you, to give you an idea of the potential costs of renovation work (which you will need to factor into your offer prices).

Finding a trustworthy builder, and making contacts at the local auction house, can help you stay abreast of the great new properties that come onto the market, as can keeping in regular contact with your local estate agent.

Remember that your finances must be in place before an auction purchase is made. Speaking with an experienced and trusted mortgage adviser well in advance of an auction will help you find the best borrowing deals for any properties you plan to purchase.

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Remember Your Exit Strategy

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It’s all too easy to get caught up in growing your property portfolio and forget why these investments were originally made. Keep reminding yourself of your ultimate goals. Perhaps you bought your first property to fund a great retirement, or you planned to liquidize your assets in a decade, to buy a place in the sun and give up your day job.

Keeping in mind that you became a property investor will help you remain focused, motivated, and organized as you grow your business.

Conclusion

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If you decide to grow your property investment portfolio, don’t try to run before you can walk. Exercising caution is preferable to over-stretching, as the property market is often volatile.

As you grow into multiple properties, try to avoid cross-collateralization, that is,borrowing against the value of multiple properties at once. If you find yourself unable to meet repayments, cross-collateralization might lead to you being forced to sell multiple properties, to pay off just one loan.

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