Building a Property Portfolio

Hutt Real Estate Agent

Real Estate Planning with Anna Manning

A growing number of investors are now buying several investment properties to help secure their financial future.

They are using a number of investment techniques to build a property portfolio including:

Negative Gearing
Using negative gearing to purchase properties with a high capital growth rate and accelerating the overall growth in the equity of their properties which can be used as security for further purchases.

Positive Gearing
Purchasing properties that deliver a positive cash flow taking into account rental income and overall holding costs such as mortgage payments and rates. Positive geared properties improve the overall cashflow of the portfolio and can be used to help fund additional investment properties.

Investing in property does give most investors important tax benefits and you should consult with a qualified taxation advisor regarding these advantages, before making a decision to purchase an investment property.

The selection of negative gearing or positive gearing techniques to build up a property portfolio will depend on the financial circumstances of the investors. For example, negative gearing may not be such an attractive financial option for investors on lower incomes.

Alternatively, newer properties that have high levels of depreciation could prove more attractive to investors with high incomes that can take advantage of negative gearing.

Investors should seek independent financial advice on the different investment strategies that can be used to build a property portfolio.

For example, making the wrong initial property investment may inhibit the ability of the investor to purchase further investment properties because of limited cashflow or poor capital growth rates.

Anna Manning is a Real Estate Agent at Leaders Real Estate Lower Hutt.
p 027 569 2749 e