I’m often asked how to ‘fast track’ a property investment portfolio and here’s how one savvy investor achieved it.
To build a high performing portfolio, you firstly need to put a strategy in place and stick with it.
This client’s strategy was to start her portfolio by building a duplex in a growth area. This takes research and due diligence as the location is crucial to the end goal.
With a deposit of just over $100,000 a duplex package was sourced in Toowoomba and contracts were signed – one to purchase the block of land and the other to construct the property. This process took around six months once the land was registered. There are significant stamp duty savings as it is payable on the land only.
Once the duplex was completed, a new valuation was undertaken and with strata titling, the property had achieved around $90,000 in equity. This equity was used again to replicate the entire exercise and build another duplex. In the meantime, with both sides of the duplex rented, the property was cash flow positive, meaning that all the rent from both sides covered all the mortgage costs.
There is no reason to sell any of the properties as they should continue to grow in value (more equity) and provide the ongoing financial ability to keep building more duplexes.
Naturally this takes time and effort with the strategy being the crucial factor. Where possible it is imperative to continue to ‘hold’ and not sell the properties so that equity and capital growth grows.