How To Grow A Property Portfolio - Free Online Training

How to Start and Grow a Property Portfolio

Here is a step-by-step guide to starting and building your own property portfolio.

Create a business plan

Creating a business plan will help you define your financial goals, such as supporting your primary income, saving for retirement, or becoming completely financially independent. A good business plan will include a timeline for how long this will take. 

Do Market Research

Researching the property investment market can help you decide on the right kind of property and the best areas in the country to invest in. You can learn more about a local area by talking with estate agents and other property professionals about current market trends. Take a look at the amenities and public transport options in an area. If they are good, it will be easier to find tenants. Joining a property investment community such as ours can help you learn to ask the right questions and learn from other property professionals. You can do some research on online portals such as Zoopla and Rightmove to get an idea of average sale prices and rental values in the area.

Choose the Right Investment Strategy

Take a look at several investment strategies to decide which one is right for you – you can always opt for several different strategies to diversify your portfolio. Rent to rent is a good way for investors with little upfront capital to get started, although you will not benefit from capital growth and could be left out of pocket during void periods. Buy-to-let is a popular gateway into property investment and offers steady rental income with the potential for capital growth. Holiday lets and serviced accommodation can generate large returns in the right location, and platforms like Airbnb or VRBO can help to facilitate this. Property flipping can be highly profitable and does not require you to become a landlord and deal with tenants, but it does depend largely on careful property selection and good management of a renovation budget. HMOs (houses in multiple occupation) offer high rental yields, but often require more intensive management as well as licences and adherence to tighter regulations. They can be very lucrative in large cities with large student populations.

Secure Financing

One of the most important parts of growing your property portfolio is knowing how to finance your investments wisely. For most investors, this starts with using a buy-to-let mortgage. These are specifically designed for landlords and differ from standard residential mortgages in a few key ways. Buy-to-let mortgages usually require a larger deposit and may come with slightly higher interest rates. 

If you’re just starting out or have limited capital, joint ventures or angel investors can help. In a joint venture, you partner with someone else who provides the funds, and you bring the time, knowledge, and effort to source and manage the deal. Angel investors are similar, often offering financial backing in exchange for a return on their investment, but they may be less hands-on. These partnerships must be built on trust and formalised with clear agreements to protect everyone involved.

Whatever financing route you take, remember to factor in all potential costs from the outset. These include mortgage repayments, legal fees, stamp duty, maintenance, insurance, and letting agent fees. You should also account for potential void periods when your property might be empty and not generating any rental income. 

Start your portfolio with one property

Rather than buying several properties at once, start small and expand over time. For your first investment property, choose one that requires minimal renovation and is easy to maintain. Once this property starts making good and reliable returns, you can think about buying more. 

Reinvest and Leverage Equity

An effective way to grow your portfolio is through remortgaging. If a property you already own has increased in value, you can release some of the equity by remortgaging it. This released equity can then be used as a deposit for your next investment, allowing you to expand your portfolio without needing new capital.