What steps should you take when building a portfolio?

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With the UK property sector continuing to outperform most analysists predictions in 2023, interest in investment property has continued to grow. Here at IPG, we find ourselves often asked the question about how best to build a portfolio.

Whilst there isn’t an exact science due to the individual needs of the investor, we do believe there are a few simply steps to take when selecting which properties form the basis for your portfolio.

Find the right deal

In order to enhance your chances of turning a recurring profit and your return on investment (ROI) through capital gains, always purchase residential properties below market value. While creating a strong property portfolio requires patience and can take some time, the right properties can substantially increase in value if you make the right choices.

Ask the experts

It may seem obvious, but we find the best first step to take is to learn is from those who have previously accomplished the goals you want to set for yourself. By taking the time to ask for advice, listen, and learn it should help you avoid making a lot of unanticipated and expensive mistakes.

Pick the right area

The best return on investment can be discovered by looking at more localised areas, which enables investors to create a profitable portfolio by setting up a strong base first.

Depending on the kind of properties you wish to invest in, it's vital to think about switching techniques. For example, if you have to resell PBSA with its student planning in place, there is typically no markup on it, even after it has been constructed. As a result, buying below market value isn't always a possibility.

Choose the right direction for your portfolio

By specialising on one particular sort of property, you may increase your knowledge in that field, helping to reduce your risk of loss, but it might restrict exciting options when you require a more liquid asset.

For instance, a portfolio made purely of student property would have proven extremely expensive to maintain during the global pandemic. By having one or two mixed in with other residential properties, it enables the investor to achieve a healthy balance through the spread of the risks attached.

Take your time

It’s important to not get carried away with the process, as with many companies in the space, they will provide a whole host of credit options to help grow your portfolio faster. It is therefore important to partner with a reputable business such as IPG, who will help you through each key touch point to ensure that the correct due diligence is completed.

If you’d like to know about any of our projects, our would simply like to get some advice on any other property investment options, get in touch with a member of the team today.