Ep. 123: Building the Optimal Property Portfolio, with Jay Anderson

In this week’s episode of the Geared for Growth podcast, host Mike Mortlock is joined by Property Strategist and Buyers Agent Jay Anderson. Together Mike and Jay delve into building a property portfolio from the ground up and consider the steps to take to create true passive income.

Jay takes the example of a 10-15 year time horizon and reverse engineers a portfolio of 3-5 residential properties. He explains the different drivers that he would look for and ways to differentiate the portfolio for optimal results. For example the first property might be a ‘set and forget’ asset with lower maintenance, and the second one might be more of a value add opportunity.

Jay then goes on to talk to the price disparity between renovated and unrenovated properties and offers advice for would-be renovators. Mike and Jay discuss the opportunities of adding value and manufacturing equity to accelerate your journey to the next property.

Considering the risks associated with development potential, Mike quizzes Jay on the premium you might pay for such properties. Jay emphasizes the importance of finding a property that stands on its own and incorporating strong cash flow into the mix. Once the residential portfolio is sufficiently built out, the conversation shifts to adding commercial property and the benefits of entering a more lucrative sector of the market.

Whether you’re at the beginning of your journey or have been building for a while and are looking for the next steps, this conversation provides invaluable information on structuring your portfolio. Jay and Mike are passionate about their work, and their enthusiasm is evident in this lively and informative episode.

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In this week’s episode of the Geared for Growth podcast, host Mike Mortlock is joined by Property Strategist and Buyers Agent Jay Anderson. Together Mike and Jay delve into building a property portfolio from the ground up and consider the steps to take to create true passive income.

• Getting started on creating financial freedom and leaving the 9-5
• Structuring a property portfolio by focusing on the first 3 to 5 residential properties
• The price disparity between renovated and non-renovated properties and why it matters
• The different income drivers and types of properties to aim for
• Does is matter what order you buy properties in?
• Getting to the next level once your portfolio is underway
• Investing in commercial property for stronger passive income

“In those three to five residential (properties) we would want not only geographical diversification but having a look at different purchase strategies with each of those purchases, so this is something I’m very strong on so as opposed to just going out and buying 5 very similar types of properties, actually breaking it down and looking at different purchase strategies” 2:02

“Regardless of what your circumstances are or market circumstances are it’s nice to be able to come back to your portfolio and say you know what we had really good year in the business we’ve got a bunch of cash sitting there cash flow’s really strong why don’t we go back and look at doing that value add thing now” 6:22

“The most common things about why people want to build a portfolio, yes it’s the wealth creation, building the network, the asset base and then the passive income – to get the passive income it’s much easier to get from a good commercial property” 12:07

“It’s really doing an in-depth health check on the portfolio and having discussions with their accountant, their mortgage broker, having a roundtable discussion and go well what do they need in terms of for them to continue growing the portfolio” 16:48

“To get a really good commercial property you definitely need a higher amount and if you don’t have that cash or equity to start off with we need to build that” 19:45

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