Embracing Risks in Building a Passive Property Portfolio

Updated: Jan 13

Property investing is arguably one of the best ways to build wealth in Australia. The number of property investors has been growing for the past two decades as more and more people choose to create a better financial future for themselves.

Property investing is simple, but successful investing that meets your goals is not simple. It is not something you should take lightly. Unfortunately, that’s what many people who have dreams of making millions with real estate do. The fact is, most property investors fail. The statistics show that around 50% of people who buy an investment property sell it in the first five years of ownership. 90% of those who continue to hold, never get past owning one or two properties. It is only less than 1% of the property investors who own six or more properties. These statistics suggest that typically many Australians fail to achieve their goals and continue to stay in their vicious cycle of rat-race.


Having said that, if done strategically, property investing can offer you the life you want. All smart and successful real estate investors conduct a thorough real estate market analysis and tread cautiously. Risk and return go hand in hand and investing in any asset class is all about balancing the two. Property investing is very rewarding and is risky at the same time, more so given the high leverage involved in this asset class. Once you effectively manage the downside risks, you can expect reasonable returns from your investments.


To manage the associated risks, smart and successful property investors conduct a thorough analysis. Research includes analysis of property cycle, cash flow, vacancy, property attributes, growth potential, demography, supply and demand, expected expenses, diversification.

Of course, embracing risks is a very demanding process. Expertise in this field is the result of years spent in real estate investing and learning from the past mistakes. Buying the right property in the right location for the right price, and that too in alignment to your long-term strategy are the critical factors that will embrace the risks effectively and help you get rich and retire early.


Should you want to choose property investing in building wealth successfully, please conduct the thorough due diligence. Alternately, leverage professional help from the specialists in this segment, who have done this themselves successfully and that too with a high conviction.


Next steps: Should you want to learn how the author built his $5m balanced portfolio in 7 years, and aspire to own something similar, feel free to get in touch via email at rasti@getrare.com.au or book an appointment here.


Disclaimer: This article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where applicable, seek professional advice from a financial adviser.


© 2020 by Get RARE Properties

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