Building a multimillion-dollar property investment portfolio is within reach of anyone who is willing to learn.
1. Buy at the right price
Hall looks at realestate.com.au every day and attends several auctions and open homes a month in the areas in which he wants to purchase. He’s also registered with a service offered by the Real Estate Institute of Victoria (REIV.com.au) to receive auction clearance rates each Saturday afternoon.
Hall has built up a network of agents across Melbourne who call him when new listings might be of interest. “I’ve also compiled a large portfolio of real estate marketing brochures I can refer to when determining how much to offer for a home,” he says.
He also tries to purchase at 10 per cent less than the owner is trying to achieve.
2. Stick to a specific renovation style
Don’t go for the cheapest fittings and fixtures when renovating. Instead, stick to a specific renovation style for your property. “This means choosing a style from the front fence all the way to the back of the house,” he says.
Research the style you’ve chosen then look for ways to integrate it throughout the home. “For example, I went with an industrial look with a feature light fitting in each room for the last place I renovated, which appealed to a broad range of buyers,” Hall says.
Regardless of the renovation style you choose, Hall advises sticking with the same colour walls throughout as well as matching handles and products to create a sense of unity.
3. Keep your target market in mind
When renovating a home ready for sale, always keep in mind your target market, Hall says.
“I knew the last home I renovated would suit a couple in their 50s with teenage children, so when my agent called and told me a couple in this target [market] were interested in the house, I knew it was time to start negotiating to get the sale over the line,” Hall says.
4. Ask open questions
Finding out as much as you can about why a property is on the market can help you know how much to pay.
Hall says he often knocks on neighbours’ doors, asks the agent why the owner is selling and how long a property has been on the market. If the house is to be auctioned, Hall also finds out if the owner will attend.
“Asking questions like these can really help you understand how keen the owner is to sell,” he says.
5. Do a quick cosmetic renovation
A quick cosmetic renovation can be a great wealth strategy for everyday Australians, according to Cherie Barber, who founded Renovating for Profit in 2009.
If you purchase a property for $400,000, set aside 10 per cent of the property value (so $40,000) for renovations and put the house back on the market within six weeks, you stand a good chance to make a 10 per cent profit margin on top of the $40,000 you’ve spent, Barber says.
“You can transform a very basic suburban house within six weeks by doing things like cosmetically enhancing or ripping out the kitchen and polishing the floors.”
Are you planning to develop a property portfolio? What are your wealth-building strategies? Tell us in the comments below.