Jun 2019

Building your Property Portfolio

We are in a celebratory mood here at JPI after purchasing our 6th property in just 3 years.

Also somewhat reflective… feeling thankful for how we got here.

Before starting JPI both Sim and I had built our own property portfolio. Small portfolios but enough to get us started and to learn from. Now together in JPI we are building something much larger than we could alone. And at the same time helping others with our knowledge and action to start their portfolios.

But this week it got me thinking, … just what does it take to build your own portfolio. Here are six points to take into consideration if you want to join those that are completely free of their day jobs and in charge of their destiny, read on!

Get started! – easier said than done, right? But you have to move forward and get going. Sim has published about FEAR and the negative effects it has on investors. Do the due diligence but if the numbers stack up, move forward!

Leverage yourself. If you have no access to loans, look for other opportunities to get on the property ladder. Talk to friends and family, see if they will loan you money to get started. Can you find vendor finance for your first property? Or is a service like JPI best for you? We offer low buy-in and great returns to help you save for additional deposits.

Maximise your cash flow. The only way to get to property number 2, number 3… number 10 is to ensure you have positive cash flow from your first and consequent properties. Do the numbers, do they add up now? today? Don’t hope for increased rents, don’t wish for capital appreciation you are looking for growth and that only comes from cash flow.

Increase rents? If or when your tenant moves out can you make low-cost improvements that allow you to raise the rent. A great example, if it costs us ¥30,000 to replace wallpaper but we can raise the rent by ¥5,000, that would pay back in 6 months and from month 7 be all profit, well worth doing.

Manage your properties. Not necessarily fully hands on but ensure your agent is doing their job. If a tenant moves out, turn the place around quickly, start marketing the property as soon as the tenant gives their 30-day notice, ensure the minimum possible void on rental income.

Know when to get out. Not all great properties stay great forever. Situations change, yields can go up or down. So manage your properties. And be brave to sell an apartment that is not producing as well as the rest of your portfolio. Don’t let one property slow your portfolio down.

So just six points to be thinking about as you build your portfolio.

To find out about our low-cost entry high return investments, contact Sim or me via the JPI website at www.japanpropertyinvestments.com