How Can You Build A Property Portfolio To Create Passive Income?

While saving money and superannuation is all part of your long-term future, passive income in the form of property investment is also a smart choice. Rather than focusing on owning a particular number of properties, your real goal should be to focus on achieving a certain amount of dollars per month, debt-free, to help you build up your passive income. How you arrive at that figure will depend on the types of property you own and the amount of rental dollars which are accumulated from those properties.

Asset and bank selection

Regardless of whether you are a first-time investor or already have a handful of properties in your portfolio, issues such as asset selection and your borrowing power will weigh heavily on your passive income outcome. Of course, cash flow management will also need to be considered when it comes to paying off those mortgages and using the rental funds to better your situation as well.

Owner-occupier appeal

It is worth remembering that not all properties make a worthy investment. The key thing you must focus on is the owner-occupier appeal. Without it, you could end up with a property that won’t help your goals in the long run. As approximately two-thirds of Australians own and live in their own home, it makes sense to target that segment of the population, particularly as they are more emotional when it comes to their property decisions.

Historic knowledge of suburbs

Knowing your suburbs, nearby towns and their sales records, both past and present, will help you in the long term. Focus on suburbs which do well over time and be adamant about watching the house prices and land prices in those areas. Research and due diligence are necessary for any property you intend to buy to increase your passive income, whether you like it or not. Consider the economic drivers behind regional areas to make sure the necessary infrastructure is in place for long-term investments.

Have a plan

You cannot create passive income overnight. You need to have a plan, worked the figures and have done your homework. What will all this look like? Once you understand how to get from A to Z, then you need to put the steps in motion. Of course, as with any good plan, you may need to tweak or fine-tune it later down the road. Don’t forget, you can’t get started and follow through efficiently without some kind of blueprint or capital growth strategy in place.

Get started

It’s easy to keep putting it off for fear of finding the right property. But if you have done your homework in terms of asset selection, you should be good to go. Remember your aim is strong capital growth instead of amassing properties just purely for the sake of it. So you may wish to look further afield than your original intentions, if those in your local area are not meeting your investment needs.