Some Tips on How to Grow Your Rental Property Portfolio

[Jon L.]

Pro-Tips on how to Scale Your Real Estate Portfolio.

30 Year Fixed Rate Mortgages:

By using a 30 year fixed-rate mortgage, you will be able to pay lower interest rates on your property which can offer you more opportunity to reinvest your money.

Screen Resident Thoroughly:

Placing the right residents can be vital to your success as a real estate investor and can help you reduce unexpected vacancies. Stricter criteria for tenants can be helpful when screening to get the best residents for your rental property. Require co-signers and several references in order to get the best idea of who you are placing in your investment property. 

Save Money:

Invest any money you are making back into your real estate business. Don't use your new income to improve your lifestyle with new clothes, a car, renovating your own home, etc. You never know when your rental properties may need repair or when you might be hit with a vacancy. In general, you should have your savings account unrelated to your business for personal use or emergencies.

Take Contractor Relationships Seriously.

All properties need both major and minor repairs at some point. For this reason, developing great relationships with contractors in different fields is important to your success. If something happens to your property, you want to be prepared to prevent having to spend additional money on fixing an ongoing issue so having these relationships in place is a must.

Invest in a variety of markets

Investing outside of where you live is one of the best ways to source great deals. If you’re concerned about not being close to the property to manage it yourself, don’t worry- there are plenty of services, tech solutions, and management companies to help you with the problem of distance.

If all your properties are in the same place, they're exposed to the same risks. If a large employer shuts down or a weather disaster occurs all of your properties could be damaged or go vacant in a year.If you have investments across the United States, you're much less likely to endanger all your properties, which provides you with financial protection.

Refinance one of your properties:

Refinancing a property can often provide you with better loan terms and free up more capital to reinvest into another property.

Consider Working With a Property Manager:

If you want to scale your real estate investments, you should be spending your time working on deals rather than dealing with the day to day issues that occur at your rental properties. Partnering with a great management firm can not only enable to you invest in several different markets, but can create the opportunity to turn your passive real estate investments into a source of financial freedom.

Utilize 1031 Exchanges:

A 1031 exchange allows you to avoid paying capital gains taxes. To perform a 1031 exchange, you must use the profits from the sale of one of your properties to purchase another property (or properties) of equal or greater value within 180 days or before the due date of your taxes, whichever comes first.

Partner With Other Real Estate Investors:

To lessen your financial burden, you can partner with other real estate investors. Partnering with other investors may make it easier to scale your portfolio, it may also decrease your income. Additionally, if your partners decide they don’t want to invest anymore, you'll have to restructure the way you approach your next investments

These are just some of the many ways you can increase the size of your real estate portfolio. If you’re interested in learning more, feel free to reach out - I’d love to connect with you. You can find my contact information as well as Mynd Management’s website, through my signature below.

What are some ways you've been able to scale up your portfolio?