How to develop a property portfolio?

If you’re wondering how to make a living from property, you’re going to have to invest well. The reality is that owning one property is an achievement in itself, so going on to own a whole fleet of properties might seem like a monumental feat… but it’s not impossible. If you’re savvy, have an eye for a bargain and are willing to sacrifice the time and the money, this Wards guide can show you how to develop a property portfolio of your very own.

develop portfolio 1

What is a property portfolio?

A property portfolio is a term used to describe the collection of investment properties that you own. This can include student lets, a holiday home in another country, HMOs (House of Multiple Occupancy) and even commercial properties.

How to build a property portfolio empire

Becoming a property mogul and knowing how making a living from property starts with your lucrative portfolio. Here are five things you should consider when starting out your career in property.

1. Have goals

A good place to start is: why are you investing in property? Answering this question will help determine what you want out of your investment and keep you on the right track.

Knowing how to make a living from property means knowing that there are two ways you can make money from your investment:

a. Rental income

b. Increased capital value

As an investor, you should decide exactly what you want from your property early on as it will influence the way you invest your money. Do you plan to buy a house, let it tick over for a few years and then bank on generous capital appreciation when you come to sell? Or are you looking for a buy-to-let and to become a successful landlord? In fact, what’s stopping you doing both? By having your end game in mind and considering the short goals and how they contribute to the final one, you’re more inclined to be grounded in your plan and will make sensible investment decisions throughout.

2. Start small

It’s good to be ambitious, but it’s even better when you’re sensible and start small building your portfolio over time. The market can be uncertain as can interest rates, and you don’t want to run the risk of taking – well – risks. If this is your first rental investment, put an offer on a nearby home, such as a one-bedroom flat that you can be available to visit at the drop of a hat should you need. Only once you’ve got the swing of property investments and have a better idea of what it means to be a property investor should you branch out to something bigger.

3. Keep an eye on your budget

You’re going to need to be shrewd when it comes to your finances. This could mean negotiating a lower offer on the asking price of a potential property but it will no doubt mean making sure that your monthly outgoings don’t exceed your income as this will have a major effect on your rental yield. As a property investor, you’ll need to be compliant and make sure that your home is liveable, which in itself comes with expenses – what’s more, failure to do so will result in hefty fines.

4. Have a contingency plan

Unless you’re very lucky, there may be an odd bump in the road every now and again during your career as an investor. Most of the time, this will prove to be fine if you can recover quickly. The key to success is preparing for every eventuality and having an emergency plan to help keep you on track if things don’t run smoothly. Some scenarios to consider and prepare for will be:

  • What if your tenant stops paying rent?
  • What if the tenant moves out and you don’t get a new one for several months?
  • What if your energy rating (your Energy Performance Certificate) isn’t high enough?

Fortunately, your Wards letting agent or property manager can advise you in preparing and preventing such occurrences.

5. Think about your tenants

If you’re planning on becoming a buy-to-let investor a crucial part of your investment will be your tenants. When buying a rental property you’ll need to work hard to make sure that your tenant is happy. A satisfied tenant will be inclined to lease your property long-term, meaning that you can bank on a regular income. Just make sure that you’re up-to-scratch with your landlord responsibilities.

How much money do you need to start a portfolio?

If you want to succeed at property investment and become a millionaire from your portfolio, you need to have money to start off with. There are plenty of costs associated with buying an investment property, which are:


When applying for a mortgage you’re going to need to put down a deposit – however – if you’re investing, you’ve probably got money tied up in other assets, such as your existing home, in which case you can get a second-home mortgage…


This life-long loan is of course a hefty expense in itself. There are many different types of mortgage, which will be offered to you depending on your circumstances, should you even need one. Generally speaking, if you’re using your current property to buy your second one, you can usually borrow up to the equity as the down payment. Just bear in mind that you do risk losing your primary residence if anything goes wrong financially. Of course, a mortgage advisor will be able to steer you through the process and help you decide what’s best.

Stamp duty

For the purpose of this article, we’re going to assume that you’re no longer a first-time buyer who’s exempt from paying stamp duty. Normally, stamp duty is the tax paid on homes worth £125,001 or more. If you’re buying additional properties, there’s a 3% increase on top of current rates on homes above £40,000.


Cliché as it may be, the old saying that time is money is especially true when it comes to investing. No matter how hands on you plan to be, the reality of being a property investor and landlord is that you can’t do it all yourself and you’ll need to employ someone to do it on your behalf. Whether it’s cleaning the property for a new tenant, collecting the rent or giving the rooms a fresh lick of paint, if you can’t do it yourself you’ll likely have to pay someone who can.

The buying process

When buying a house, there will be plenty of expenses that crop up, for example – the cost of the property valuation and not to mention the fees from the surveyor, estate agent and solicitor to navigate the swiftest transaction possible.

Recap: How to develop a property portfolio

Becoming a property investor is hard work and takes a long time, especially if financial freedom is the goal. The reality is that you’ll need a smorgasbord of properties and a diverse investment portfolio with stocks, shares and pension schemes if you want to live comfortably off your investment.

You’ve got to start somewhere and the key to earning money is to diversify your assets. Even purchasing one property is a sound investment – that second one only adds to your security. Be patient and make sensible decisions and you won’t go wrong. Get in touch with Wards, and we’ll steer you in the right direction.

For more advice contact our property investment expert