Have you ever felt frustrated with the sluggish growth of your investment portfolio? You’re not alone. Many investors struggle to achieve the kind of financial progress they desire. The culprit? Often, it’s a lack of balance within the portfolio itself.

Having a well-diversified portfolio, particularly one focused on commercial properties, is the key to unlocking exponential growth. But diversification alone isn’t enough. Three crucial elements need to be considered to increase property-related earnings; cash flow, growth, and uplift potential. 

By incorporating these elements, you can build a portfolio designed to deliver not just stable returns, but significant value appreciation over the long term. Let’s delve deeper into the power of a balanced portfolio and the three-step approach to constructing your own “Unikorn Portfolio”.

The Unikorn Portfolio: A multi-faceted approach to commercial property investment

The Unikorn Portfolio prioritises a balance of three key ingredients:

• Cashflow
  A strong foundation for the portfolio, allowing investors to detach themselves from the financial equation. Commercial properties are considered ideal for generating cashflow, even in high-interest environments.
• Growth
  Properties with the potential for significant value appreciation within a specific timeframe (2-3 years) are strategically chosen to leverage the cashflow from other assets. Key growth areas are identified through market research.
• Uplift
  Vacant properties with the potential for renovation and value creation are strategically purchased. The uplift comes from refurbishing the property, attracting tenants, and then selling or refinancing to access the increased equity.

Building a Unikorn Portfolio

For those with growth-heavy portfolios, a shift towards cashflow-generating commercial properties is recommended. This provides a financial buffer and allows for further investment. Once a cash flow foundation is established, properties with high-growth potential are incorporated. This strategy leverages the cash flow to finance new investments.

Finally, uplift projects can be introduced to create chunks of equity that can be used for further portfolio expansion.

Benefits of the Unikorn Portfolio

The Unikorn Portfolio offers several advantages:

• Faster scaling: By combining cashflow, growth, and uplift strategies, investors can achieve exponential growth in their portfolios within a shorter time frame.
• Reduced risk: Cashflow provides a safety net, and strategic property selection minimises risks associated with growth and uplift projects.
• Passive income generation: The ultimate goal is to create a portfolio that generates substantial passive income, allowing for financial freedom in the long run.

Commercial property investment: Considerations and strategies

Commercial property investment can be a lucrative strategy for building wealth, but it’s important to approach it with a well-defined strategy and a thorough understanding of the market. Here are some additional factors to consider:

• Market research
  Conducting thorough market research is crucial for identifying properties with growth potential. This involves analysing factors like demographics, job growth, and infrastructure development in the target area.
• Due diligence
  Before investing in any property, it’s essential to perform comprehensive due diligence. This includes evaluating the property’s condition, rental income potential, and potential risks like vacancy rates and operating expenses.
• Financing options
  Commercial property investment often requires significant capital. Explore different financing options, such as bank loans, hard money loans, and private equity investments.
• Property management
  Unless you have the time and expertise to manage commercial properties yourself, consider hiring a professional property management company. They can handle tasks like tenant screening, rent collection, and property maintenance.

Commercial property investment can be a powerful tool for building wealth and achieving financial freedom. By following the principles of the Unicorn Portfolio, conducting thorough market research, and carefully evaluating potential investments, you can increase your chances of success in this dynamic market.

Remember, this is just a general overview, and it’s advisable to consult with a financial advisor or a buyer’s agent experienced in commercial real estate before making any investment decisions. They can help you assess your risk tolerance, and investment goals, and develop a personalised strategy for building your commercial property portfolio.