How to Build a Property Empire: Sustaining Your Property Portfolio
So you have everything you need to create a thriving portfolio. But how do you maintain it? This is the longest period of your investment journey and whether you’re holding or adding to your assets, sustaining your property portfolio is vital.
How you manage your properties is largely down to your individual circumstances. Some investors prefer to get their hands dirty and run the entire thing themselves, while others are happy to go hands-free.
Hands-on investors will typically do everything themselves, from sourcing tenants to performing maintenance. This type of management is ideal for the investor that wants full control over their investment or wants to save money that would otherwise be spent on these supporting partners.
Hands-off investment is the alternative for investors that cannot commit to full-time management of the investment or those investing from overseas. In both cases it’s unfeasible that these landlords would be able to do everything themselves, meaning working with a trusted partner is necessary.
A trusted network of partners is one of the most beneficial things an investor can have in their arsenal. Building a rapport with letting agents, property managers and even financial advisors can be incredibly useful at the start of an investment and will only carry through in the long-term.
Having a relationship with a lettings agent in particular can be useful as they can also offer local knowledge of a market. If you’re investing somewhere relatively new (or long-distance as the case may be), having an agent working with you will only supplement your research into demand and help you understand what tenants are looking for.
Regardless of the way you manage, time is your most important resource. You should have a holding pattern in place. Ideally, you’ll have thought about this during the planning stage of your investment but understanding that you’re planning to hold for five, ten or even 15 years can help you make more informed decisions on future goals.
Time also allows you to maximise the results of your investments, especially if you’re focused on building consistent long-term rental yields. The longer your investment has to gain momentum and benefit from natural market growth, the better it can deliver towards your financial goals.
Consolidation can be a great way of maintaining multiple properties at the same time, especially if you’re struggling to manage finances. Wrapping your loans or repayments into one means you can get a better idea of what you’re paying and plan more efficiently around this.
On the subject of finances – it’s good to have a separate ‘rainy day’ fund that can be accessed during challenging times. Void periods can be painful on a single property but can be devastating when multiplied across a portfolio.
Having a fund that can be accessed for emergency repairs or to cover mortgage repayments during voids can be a lifesaver for portfolio investors. It’s common for investors to use their remaining rental profit (after mortgage repayments are paid) to keep topping up this rainy day fund.