Portfolios are like expectations – they need to be managed!
Buying an investment property in New Zealand is one thing, purchasing multiple properties is another entirely.
While you may hear the term "portfolio management" get bandied about from time to time, you're probably wondering what it really means.
Simply put, portfolio management is all about arranging your assets in a way that will hopefully increase profits and reduce risk. The question is how.
Spread the risk
One key piece of investment advice, whether you're buying houses or stocks, is to diversify.
Think of it this way: If you buy all your residential investment properties in the same neighbourhood, you're putting all your eggs in one basket. If property prices drop in that particular area, or you're unable to find tenants for your properties, all your investments may begin to lose money.
Diversification helps you reduce this risk by spreading around your investments. For instance, while you may focus on houses, why not expand with apartments, as well?
Location is also an important factor. You may find a great area to buy in, but it can also offset your risk if you purchase in another area that won't be affected by the same changes.
Different markets will have separate advantages and disadvantages, so weigh your options when purchasing multiple properties.
Get a helping hand
A single property investment in Hamilton can be easy enough to keep an eye on, but what if you have multiple investments in Hamilton and Auckland. Can you really spare the time necessary to check on these properties and tenants on a regular basis?
Even if being a landlord is your full-time job, a large portfolio can mean you end up not giving all your properties the care and attention they deserve.
Utilising the services of a qualified property management company can help you stay on top of your responsibilities and obligations while also freeing up more time to focus on the big picture of investment: Turning a profit.