Grow your portfolio through diversification

It never pays to have all your eggs in one basket with whatever kind of investment you are doing and the same is true of property investment. Diversification is key to achieving success and reducing your risks. With the property market being so varied you are bound to experience some highs and lows with your investments so it’s about capitalising on the positives when you can so that they offset any potential negatives that may happen.

 

For example, if a particular area of the property market is seeing a big surge in the market i.e. student property, then it makes sense to have part of your portfolio in this area. On the other hand, if part of your portfolio is experiencing a dip at the moment then by at least having some money tucked away in an area that is currently booming will mean that you won’t suffer too much.

 

You may argue that you should put all your money in the area that is booming and, of course you can, but that’s a fairly high risk strategy and it’s not for the faint hearted. When it comes to building a property portfolio it’s sensible to have a mix of asset classes so that you get a good balance.

 

So, if you’re a traditional property investor who likes to buy properties from auctions, do them up, and sell them on, have you ever considered that there might be a better way of investing your money?

 

This is where diversification could pay dividends. As I’m sure you are aware, there is a huge demand for student property at the moment due to the number of students from both home and overseas and not enough decent accommodation to go around. There are some fantastic opportunities with purpose-built student accommodation across some of the UK’s biggest cities at the moment so this is an area that you might want to look into. There’s no expense in having to refurb the properties because they come already furnished and there’s no hassle with tenants because all student properties are managed. Could this be a way of diversifying your portfolio?

 

Alternatively, you may want to look at prime residential developments in city centres. City centre living has been on an upward trajectory for a while now and, aimed at largely a young professional audience, these types of properties are being snapped up quicker than they can be built. Some excellent gains can be made by buying off-plan within this asset class so this may be another area that you might want to look at in order to diversify your portfolio.

 

If you are looking for ways of diversifying your portfolio and would like to have a chat about some of the opportunities that are currently out there, then please contact us now.

4 November 2015
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