Real Estate Investing Strategy-Balance Portfolio Model
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					Under this model the investor attempts to balance cash flow and capital growth in a single portfolio. It consist of different types of properties in the stable; each giving different rental yields and capital growth. We can roughly separate the three types of properties as follows: Medium yield and medium growth; condominiums, apartments Low yield and high growth; landed properties such as bungalows, duplex etc High yield and low growth; student apartments, service apartments, special purpose properties. High & medium yield properties (condos) generate positive cash flows to pay for low yield properties (duplex), thus minimising the strain on cash flow. The amount of comfort that the investor enjoys will depend on the weighting given to the type of properties held. For instance in a fully balanced portfolio the following combination of properties may be held.                             Type                Percentage of holding %             Low yield & high growth                50%             High yield & low growth                 20%             Medium yield & medium growth    30%                             Total                              100%    The investor creates the portfolio and sits back without worrying as the portfolio will give a slight positive cash flow that can buffer any increase in interest rates. Different combinations are possible depending on the appetite of the investor. An alternative to the above is to placed a larger down payment and take a lesser loan amount to create positive cash flow for the low yield/high growth properties at the very outset. Using the balanced portfolio model there is less need for monitoring and managing the properties held.
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