Diversifying your property portfolio

Diversifying your property portfolio

When it comes to property investing then it makes a lot of sense to diversify and reduce the amount of risk you are taking. The property market is incredibly varied and many investors experience highs and lows with their investments. However, it’s the savvy investors who know how to capitalise on the positives so that they can offset any potential negatives if and when they happen.

For instance, if a particular section of the property market is seeing strong growth, student property being a good example, then it is sensible to have a part of your portfolio in this area. Conversely, if part of your portfolio is dipping slightly then at least you will know that this will be counteracted by the part of your portfolio that is currently booming.

Some would argue that you should place all your investments in the area that is currently booming but that can be a very high risk strategy. Putting all your eggs in one basket is never a good idea in any walk of like and property investment is no different. When building your portfolio, it always pays to diversify and have a good mix of different asset classes.

Whether your interest lies in commercial property, traditional but-to-let, HMOs, or flipping properties, if you only concentrate your portfolio in one of these areas then what is your contingency plan?

Student Property

This is where diversification could be a good option. For example, there is a massive demand for student property in the UK to meet the needs of the thousands of UK and international students who come over every year. There are some excellent investment opportunities for PBSA (purpose-built student accommodation) in the UK’s university cities so this is an investment class that you might want to explore. With student property there’s no additional costs to factor in for refurbishing because they are already furnished. They are also maintained by a management company so you don’t need to worry about that either. If you’re looking for hands-off, hassle-free investments then PBSA might be the answer.

Prime city centre residential developments

Another great way of growing your portfolio is looking at city centre residential developments. Britain’s cities are growing as more young professionals gravitate towards them to live close to where they work and all the attractions that the city has to offer. Prime city centre residential developments are in high demand and by purchasing off-plan, you can make some excellent returns and enjoy good capital growth when you decide to sell.

There are many ways you can diversify your portfolio so remember to explore the options that are available the next time you are looking to invest.