In investment as in life, things change. Interest rates rise and fall and your financial circumstances will change depending on your work, family, and other investment choices.

The key to managing your portfolio is to keep it in line with your current financial and lifestyle circumstances. Often, it’s not worth trying to tough it out through hard times, especially when there is an option of selling a property, paying down debt and stabilising your position.

One of the best ways of managing your portfolio is to ensure that you get off to a good start. This involves starting with an investment property that is within your means. Depending on your personal situation and how the property performs, a second property can be added one to three years later.

When building a property portfolio, some people find it useful to alternate their investments between off the plan and completed stock. This allows them to spread settlement times into a more achievable timeframe.

For investors who are three to five years into their property investment strategy, it may be worth considering selling. This is especially the case if your property has experienced strong capital growth and is reaching the top end of the market for that area. Once a property reaches its peak value in a particular area your investment equity stops working as hard – and it may be time to look further afield.

Selling an investment property that has reached its market peak can help you to avoid a situation where your equity begins to stagnate or go backwards.

Selling also has the advantage of providing enough equity to invest into two or more new investment properties in high growth areas.

Regardless of whether you chose a positive or negative gearing option, it’s important to think about interest rates. How will an increase in interest rates affect your ability to service the loan? Interest rates are low today, however they won’t stay at this level forever. You might want to set part of your loan at a fixed interest rate for a period of time in order to avoid the risk of sudden interest rate rises. Alternatively, you may choose to ‘see what happens’ with interest rates and simply sell the property down the track if it becomes too difficult to service.

There are lots of different strategies for successful property investment. The key is to find which one will work best for you. Whichever strategy you choose, it’s important to remember that property investment should always be approached as a business decision. If you become emotionally attached to a property you could make costly mistakes.