9 Steps for Growing a Safe & Sustainable Property Portfolio

If you’re interested in growing your property portfolio, then the tips listed below will surely help you achieve it.

In Australia, majority of property investors only owns 1 or 2 properties despite great property investment options. Several reasons for why investors don’t expand into owning more property are listed below:

  • They think they don’t have the ability
  • They don’t know how to manage their portfolio
  • They bought the wrong properties
  • They didn’t structure their finances correctly
  • They thought it was too hard
  • Fear
  • They are trying to do it on their own

We commend your courage for reading this article because you are now transforming your interest in growing your portfolio into action! You are now starting to educate yourself and that is exactly what the majority of investors are afraid to do. Congratulations for taking this important step.

Everyone starts from a different position, with their own goals. Therefore each investment strategy should also be structured differently to suit your personal situation. This article is written to provide you with ideas and should not be considered as a personal financial advice. Seek a suitable professional advisor when making serious property investment decisions.


Why Investors Don’t Buy More than 2 Properties?

How many properties can you afford if each property will cost you $1,000 per month? Unless you have a large annual income to cover this cost, then the answer is: Not many because sooner or later you will run out of money.

With very little research beforehand, most people end up buying properties that only costs them a lot of money each month. They later find out that they are unable to buy more property because they have run out of disposable income or the banks say no. Another reason is they run out of equity or capital to use on another property purchase. This is because they gave their lender too much when they purchased their initial properties, therefore they have to sit tight until they can raise more capital or save extra funds and it all gets too hard.

So, how can you avoid this situation? How will you be able to buy more property and grow your portfolio? We sincerely hope that the following tips will help you into growing your portfolio, not only to 3 properties but many more.

1. Getting Started

Take your time and prepare yourself with the right information that will suit your financial position, goals and risk levels. When choosing your first property, don’t take too much time trying to find the perfect property. There is no perfect property, that’s like waiting for all the traffic lights to turn green before you start driving. The first property will be the hardest as it will be a steep learning curve and take you outside of your comfort zone.

We recommend seeking the help and guidance from a team of professionals with different areas of expertise. Amongst many others, the main ones we would recommend are,

It is easier and quicker to learn from other people’s mistakes that have gone before you, than to make your own.  Learning by trial and error will cost you both time and money, more importantly it can knock you confidence for a six.

2. Leverage your Equity

If you already own one or two properties then you can speed up your property growth by leveraging the equity you already have in your properties. Using your equity is a way of buying a new property without having to put any of your own cash into the property purchase. There is no cash deposit required as you will be borrowing all the funds against your equity in your existing properties. Equity can only be accessed in 2 ways:
(1) You can sell your property.
(2) You can borrow money against the equity – Note: Be careful not to overextend yourself when it comes to your borrowings. Manage the cash flow of all your loans including the equity loans.

3. Manage your Cash Flow

One of the main reasons why investor’s don’t buy more property is that they simply cannot afford to service the repayments on their existing properties. If investors could instead buy the property with strong income, low maintenance, high tax depreciation benefits and growth with each of their properties, their out of pocket expenses would be drastically reduced and or be positive in cash flow.


We cannot stress this enough, without good cash flow management you cannot afford to keep adding more properties. Increasing your cash flow by selecting the right properties and you can grow your property portfolio.

4. Enhance the Value of Your Properties

Invest for cash flow or for growth in the value of your property (capital gains) is a frequent situation faced by investors. However, WE say why not go for both with quality properties?

It is amazing what a difference the right new home can make in your cash flow, especially your after tax cash flow. Don’t be scared to look for good house and land packages with designs for today’s market in mind. The savings on government fess like stamp duty and registration of title will offset the interest costs while building. The interest on your investment loan is tax deductable even though you don’t have a tenant until the home is finished and you also don’t need to use as much equity or savings because your government stamp duty is considerably lower, therefore you have more left over towards another property.

Buying the right properties can add value and increase the speed at which you can buy more properties.

5. Keep an Eye on Your Portfolio

Your portfolio won’t take care of itself. If you buy a property and expect it to take care of itself, then you will find it will be frustrating, costly and not enjoyable, creating a barrier for you to move forward in buying more property in the future.

Use a very competent full time property manager who understand the area and that you are their client, not the tenant. Keep your eye on the condition of your property and speak to property manager about things that need maintenance to keep your rental income and property value up. Work with your property manager to choose your tenants wisely, making sure they are paying on time and taking care of your property. Keep an eye on your property manager. If they are horrible, inefficient, or costing you money then sack them and get a new manager.

6. Cut Your Losses When You Need To

Financial people call this “opportunity cost”. We see it all the time where someone has bought a poor performing property, or the wrong one for what they are trying to achieve, it’s a dead investment.

A wise saying is, “ride your winners and cut your losses”. Many people do the opposite and ride their losses and cut their winners. They hold onto a bad property, tying up equity, acuminating losses, missing out on opportunities and all to avoid admitting it’s a dud or poor decision. Take action for the poor decision by not holding onto a property that’s not going to serve you.

7. Mixture of High Rent and High Growth

The perfect combination of strong cash flow and high growth depends on your financial position, risk profile and time frame. Strong cash flow properties can support the high growth ones; the cash flow keeps more of your money in your pocket to service new purchases.

If you plan to retire in 5 years’ time on the cash flow, then you might not want to risk going for high growth and poor rental income properties, you may just want to focus on the cash flow to retire on.

However if you are young and want to build your portfolio quickly, while keeping or enjoying your job, you may not be fussed about chasing strong income from your property just yet. In this case you may want to purchase a balance portfolio of strong cash flow properties and high growth property. This way the strong cash flow properties can support the high growth ones, keeping more of your money in your pocket to service more new purchases.

8. Don’t Cross Collateralise

Cross-collateralisation means a loan which relies on more than one property for security – that is, there are two or more properties which are the security for one loan. If something goes wrong then the bank controls them all and may force you to sell multiple properties to service the loan.

If you default on a loan the lender will decide which property to sell to recover your debt. It may be the lender considers your owner occupied home easier to sell and will do so if the properties are cross collateralised.

You can normally avoid this by financing each property independently with a different lender. This can be done by accessing cash from an equity loan from one property and using this cash as a deposit on another property. A good mortgage broker will also be able to compare lender interest rates and more importantly for investors, the differences in lenders credit policies.

9. Have an Investment Strategy

Many people just go out and buy property and put a tenant in without a second thought as to what their long term investment plan is. They just hope to make money and they’re not sure where or how the property will make money for them. Remember that not every property is a good investment, and not every property is a good investment for you.

This is a hit and miss approach and may work for one or two properties. If you want to buy more property than the average investor then you really need to have a good strategy of how you are going to do it and what your end goal is.

Knowing your investment strategy allows you to create a list of what you want in a property and what will work for you. This list will then keep you focused and makes buying the right property much easier. You will be able to save time by not running around to all the properties that aren’t a fit, make more money and grow your portfolio quicker.


Focus Your Investments

Find one investment strategy that suits you. This strategy should match your risk profile and empower your end goal. Study this investment strategy; read books about it, attend seminars if necessary and get your hands dirty by investing and refining this strategy. Keep learning for you to get better.

Always remember that whatever your investment strategy, you will often make more money by being focused. Become very good with one discipline than trying all your fingers in different pies.


Be careful in putting all your properties in one suburb! It is wise to spread your investments across a variety of areas. This is important because constant growth allows you to continue investing. By doing so, you are increasing your chances of protecting your capital and rental growth. Spreading your properties into different sates can also help with minimising or managing land tax, as this is a state based tax. Different areas can go through a year where rents and house prices stay flat, however it is very rare to find that across a number of suburbs or states.

So be focused in your strategy, but have some diversity in the areas you invest in.


It is important to study and learn from people who are already multiple property investors and are successful with the same strategy you have chosen. Are they fruitful in producing in their own lives that which you are after? If so, read their blogs, go to seminars, watch videos and read books. Being inexperienced is never an excuse when it comes to investment. The knowledge and tools you learn stay with you for life. That is why if you invest in your education then the amount of money you can make from your investments becomes almost unlimited.

Work towards choosing a professional team to support you as you grow, a team that will protect your blind spots and watch your back.

Interest Only Loans

Being a multiple property owner is similar to running a business, managing the cash flow, keeping your costs down, while your aim to make a profit.

One of the most obvious and often overlooked expenses is your loan repayments. Interest only loans for investment properties increase your cash flow by lowering your expenses. They reduce your minimum repayments to their lowest. Increasing rent (which isn’t always an option) isn’t the only way to create a positive cash flow, lowering expenses and maximising tax deductions can also achieve a positive cash flow.

Here are a few points to consider with Interest only investment loans

  • The interest only repayment is paid with rental income before tax
  • The smaller interest repayment allows you to fund the repayments on more properties
  • All of the interest only repayment for investment is tax deductable against the income
  • Principal repayments are made from after tax dollars (for PAYG you have to earn the money, pay tax and then pay the principal), having a bigger impact on your lifestyle.)
  • The principal part of the repayments on investment loans is not tax deductable and can’t be used for negative gearing
  • Principal and interest repayments are higher, reducing your cash flow and restricting the number of properties you can buy

Bottom line, you CAN easily buy more than one or two properties! You just need to plan, be smart about it, invest wisely and be persistent. Imagine achieving financial freedom with multiple properties all paying you rent. This is very achievable if you put these tips into action!

Book Your FREE Strategy Call with us now the longer you are in the market the more growth you can achieve