Growing your investment portfolio should be at the top of your 2024 goals, and there is a very quick and effective way to grow it exponentially—by using strategies in both residential and commercial property.

Set yourself up for success by being active in the next 3 to 5 years, putting yourself on a trajectory toward financial freedom. Retire to the life of your dreams without having to wait 10, 15, or even 20 years to get there.

This isn’t about creating a get-rich-quick scheme. Instead, it’s a strategy-driven, portfolio-building exercise that requires you to be active and buy, regardless of the market conditions, by utilising creative strategies in both residential and commercial sectors.

How do you get started?

The easiest way to get started—regardless of whether you’re in your 20s or 50s—is to begin with a property that will give you growth in equity. If this option isn’t for you, there’s another way. If you’re just starting your investment journey and can afford to be negative, consider investing in a residential property.

Here’s why. If you’re in your 20s or 30s, you have strong earning potential, making it easier to invest in residential property. You can even spend some time improving the property, but avoid buying and holding properties.

Many people hold properties due to work commitments or career aspirations without realising it adds an extra 3 to 5 years to their journey. It’s crucial to buy, renovate, and flip or buy, renovate, and refinance.

So how do you go about it the right way?

Consider buying an undervalued house—or an undervalued apartment if a house is out of your price range. If you want to stay in the metro area, start renovating to create an uplift.

If you’re just starting, you can probably buy a residential property under AUD 500,000. Ensure the property generates income to cover the outgoings and mortgage. Invest AUD 30 to 50,000 in renovations with the potential to double that in income. You may even increase the value by AUD 100,000, allowing you to recycle equity and repeat the process. Think of it as ‘equity recycling’ or ‘equity depositing.’

But what if you can’t afford to get started?

If you’re in your 40s or 50s, just starting, and can’t afford to be in the negative even by one dollar, invest in a commercial property. It should be your first property as you need a high-yielding property close to the metro for natural yield compression in the future.

Commercial capital growth is faster and more fluid than residential, not relying on market demand, supply, and market confidence. So, opt for high-yielding office or retail space in Melbourne or Adelaide, rather than breaking even on a warehouse in regional Queensland.

How do you combine the two strategies to move forward?

If you choose manufactured equity in residential, it’ll give you faster growth than commercial. Invest in residential on the back end, and once you have equity, put it into commercial properties for cash flow.

For example, buy a AUD 500,000 house, spend AUD 50,000 on renovations, and potentially increase its value to AUD 650,000. Refinance or sell, and with the gain, put AUD 200,000 into commercial.

Commercial strategies like natural capital growth ensure you won’t be negative, creating a cash flow buffer. Combine this with residential strategies, and you’re building wealth faster with a neutral or positive cash flow as interest rates drop.

Utilise both strategies, doing residential manufactured uplifts on one end and investing in commercial property on the other. By combining both, you’re maximising your investment potential.

Make the most of your investment with a combined strategy

No matter where you are in your investment journey, by combining strategies for both residential and commercial investment you can create a strong property portfolio for 2024.

If you’re thinking about making an investment then a combined strategy can help you become more successful and an experienced buyer’s agency can help make sure that you select the right investment property.