Uncertainty has rocked the lending market over the past 12 months, with interest rates rising, values falling or flatlining and borrowing power plummeting for many would be investors.

But while it may take time for things to normalise and confidence to return, there are still loans being given out and opportunities to grow good portfolios there for the taking.

Investors who follow the B.Invested way of thinking can be far more likely to expand their property portfolios than others, as the yields and potential for growth on offer are better and safer.

One of the key factors is making sure you target the price points where the renters are paying the best yields. Hint: It’s not on $1 million properties. If you buy for $500,000 or less you have a much better chance of achieving a positive yield than if you buy for $1 million plus.

If you have several cheaper properties, you are likely to benefit from more growth than one expensive property, for both value and rent. Not only that, but it’s easier to get loan approval too.

Spreading risk and reward

Having three $300,000 properties will likely see you double your money much faster than having one $900,000 property. If each of the three cheaper properties rents for $400 a week, it will also leave you better off for cashflow than the $900,000 property, which would only likely bring in rental income of $700-$900 a week, depending on location and market conditions.

Not only does this amplify your rewards, but it seriously reduces your risk. If one market goes bad, or interest rate rises put you under financial stress, you can separate your assets by selling one off to pay down debt on the whole portfolio. 

You are less vulnerable, less exposed.

Think about purchase price first

Zinger Finance mortgage broker Rose Renouf says it can be savvy to think first about the purchase price point, before beginning to think about locations. Settle on a budget and strategy and then look for the markets that will allow you to purchase a good deal within that range.

If you set a budget of $300,000 for example, you can chase the best yields and conditions in various cities and regional centres around Australia.

B Invested founder Nathan Birch says getting this aspect of the strategy right is key to getting to where you want to be as efficiently as possible.

Nathan didn’t buy his own house to live in until he had more than 100 investment properties. Of course, by that time, he had created enough wealth to create his ideal permanent place of residence, while he says that many regular Aussies buy an owner-occupier residence that is simply “good enough to get by” and mortgage themselves up to the hilt with that, before beginning to think about building wealth elsewhere.

Get the right team

A good broker can tell you the things you don’t know about finance. How to structure loans to allow future growth and expansion, the best ways to maximise the equity you create and the lenders that will suit your goals. They will help you scale up your portfolio, navigate tougher lending conditions and set yourself up for future success.