When someone mentions “buying real estate”, the first thing that probably jumps to mind is your own home. While buying property has this very clear practical benefit, it can have an important role to play in your portfolio as well, especially as a hedge protecting you from the fluctuations of the stock market. Although property investment has become very popular over the past few decades, it can be a lot more complicated compared to things like bonds and equities. If you’re about to take your first few steps into the property market, it’s essential to approach it in the right way. Here’s some of our best advice for becoming a property millionaire…
Target Apartments, Rather Than Houses

Talk to anyone with some level of experience with property investing, and they’ll tell you that apartments tend to generate greater returns than houses. There are various exclusive benefits to buying a home, or foregoing brick-and-mortar property and looking into land for sale instead. However, when it’s a simple question of ROI, apartments always make better buy-to-let investments than houses. If you have a budget that can stretch to purchasing a two-bed two-bath apartment, then this can also be a very smart move. Yes, a second bathroom may sound unnecessary when it comes to apartments, but the more flexible any property in your portfolio is, the better off you’ll be.
Learn to be Patient
Before you jump into a property investment, it’s essential that you take the time to weigh up all the pros and cons. Making money from your property investments is a long-term process. If you want good returns, you should never put yourself in a position where you’re forced to sell. Far too many newbie property investors will jump on a property as soon as they hear a sales pitch from the developer or owner. Be sure to talk to some local agents, and do your own research, before signing any dotted lines.
Don’t Put All Your Eggs in One Basket

egg basket
Just like trading stocks and shares, a diversified property portfolio is going to be much more likely to weather all the turbulence of the market than one that isn’t. Don’t put yourself in a position where you’re relying on one bold gamble to generate returns. Yes, the potential for returns in that beach house may be very tempting, but if it lets you down, it’s good to have a little student property that you can fall back on. Put all your eggs in one basket, and you’ll live to regret it.
Keep an Eye Out for Ways to Add Value
One of the most effective ways to make money out of a property investment is to actively add value to it. Even seemingly small-fry purchases can prove to be incredibly lucrative. For example, if a maisonette above a shop doesn’t look too appealing, but there’s potential for an attic conversion, then you should dig a little deeper. Flexibility for adding value to a home isn’t always obvious, so make sure you’re keeping an eye out for long-term opportunities.
Learn to be Tax-Efficient
You’re never going to make your fortune from a property portfolio if you’re paying more tax than you have to. There are a lot of different ways to minimise your tax bill, and you should be leveraging all of them if you want to achieve as much capital growth as possible. If you’re married, take steps to ensure that all the rental income you draw from your portfolio is divided between you and your partner in the most tax-efficient way possible. You should also look into maxing out your savings through tax-deductible purchases, for example furniture.
Take Advantage of Local Knowledge
When you’re looking to add to your property portfolio, spotting a bargain from miles away is never easy. In many instances, you should be looking in your own backyard for property that’s so generously priced that its value can only go up. Aside from these homes and apartments being much easier to spot, you’ll already have all the important information about transport links, schools, crime and so on. It will also be a lot easier to keep tabs on tenants than it would be from another town.
Find Partners Who You Can Trust
Unless you’re a DIY wizard, have a law degree, and can manage your finances like a professional, you’re going to need at least a little help with building up a good property portfolio. The partners in your property investment mission should be people you can trust, with a lot of expertise in their field. It’s a big mistake to think that you can be successful in property investment on your own. Finding the best contractors, lawyers, accountants and so forth is essential for maximising your profits, and giving yourself a certain peace of mind throughout the complex processes you’ll come across.
Target Young Professionals as Tenants
If you want to pursue a high-income investment strategy as a means of building a seriously valuable portfolio, then young professionals are the people you should be targeting as tenants. Go for high-quality, low-cost accommodation for professionals who are fresh out of university. When you can attract the right tenants, converting a single-occupancy property into one for multiple occupation can breed significant capital gains. You’ll be able to cover the cost of refurbishment easily, with a lot of money to spare. Furthermore, you’re much less likely to get problem tenants!
Look Out for Urban Gardens
If you’re investing in a built-up urban area, then it’s important to remember how much people value a bit of fresh air. When you look at capital cities around the world, particularly London, properties with some kind of outdoor space, even if it’s just a small patio, will be worth a lot more than properties without it. The difference can be as much as 20%. While you should always look at the other typical screening factors when checking out available properties, it’s essential that you don’t go by neglecting the potential for growth in gardens and outdoor spaces.

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