Investing in property can be a highly profitable endeavour. You can generate a significant stream of income through rental payments or capital appreciation. Owning multiple properties and building a property portfolio, if done well, can enable you to generate a vast amount of passive income. Having money you don't need to work for coming in from multiple properties can put you on the path to becoming financially independent.
Investing in real estate is a smart move for any successful investor, and the more assets you have, the more success you will see. But how many properties can you own at one time? There is no hard answer to this question. Legally, there is no fixed number that you are allowed to own, but there are several limiting factors that might determine your capacity.
If you are on the path to building a property portfolio, you might wish to consider some of the factors that will influence the number of investment properties that you will be able to manage successfully.
The most obvious limiting factor in how many properties you can own is what you can afford. When buying a property, you will pay a substantial deposit upfront, and you'll have to come up with enough money to do this for each investment. On top of this, you will have mortgage payments and costs of upkeep and maintenance to consider. If you use a property management company, you will need to pay them regularly as well. Be smart when taking out loans and avoid cross-collateralization to protect your other properties if you can't pay back a debt. Only take on what you can afford.
Your serviceability is essentially how capable the bank judges you to be of paying back a loan. If you have a low serviceability rating, the bank may refuse your loan application, and you will be unable to invest in any more properties. The more serviceable you are, the more assets you can own. Increase your serviceability by growing your income, or by presenting a financial case to the bank for why you are a good investment.
Finding suitable investment properties is a lengthy process. For investors working full-time jobs, it is simply not sustainable to maintain a vast property portfolio. Take your professional and personal obligations into account and work out how much time you have to spend on property investment. If you can afford it, consider hiring a property manager to look after your properties for you.
There are several factors to consider when choosing an investment property, and you will have your own set of criteria to tick off. Factors like area, price, and rental yield will all play a part in your decision. Therefore, the number of properties you own may be limited by an inability to find investments that meet your criteria. Use a buyer's agent or online real estate tools to help you track down opportunities.
In conclusion, how many properties you own is dependent on several personal and financial factors. As a rule, you can have as many as you want, but that doesn't mean you will be able to do so successfully. It entirely depends on the resources you have available.