So, you think you’ve mastered the art of real estate investing, have you? You’ve already obtained and are successfully managing one or two properties and are thinking it’s time to buy a couple more.
There’s a lot to do when it comes to real estate investing. From finding good investment opportunities to managing them all, it’s a full-time job. Here are a few tips to help you get started on building a sizeable real estate portfolio.
Build a Team to Help Manage It All
Being a landlord is a full-time job. Each property will require your time, and the more properties you own, the more time it will require. Begin building a team of people you can trust to help you manage it all. Professionals such as property managers, contractors, inspectors, etc. will help you stay on top of things and take some of the responsibility off your shoulders.
Spread Your Investments Over Several Markets
If you’re managing everything yourself, you’ll likely want to keep all your investment properties close together for convenience. However, this is like putting all your eggs in one basket.
If you purchase investment properties in more than one market, it protects your money in the event that one market struggles, the other can keep things afloat.
Have Plenty of Available Cash
To build your portfolio, you need to have plenty of easily accessible cash to take advantage of opportunities fast. There are a few different ways to ensure you have the cash you need on hand.
- Refinance or sell an existing property
- Partner with other investors
- Do a 1031 Exchange when you sell an investment property
Know Your Investment Goals
It’s hard to achieve goals when you don’t fully understand what it is you hope to achieve. Before you begin looking for investment properties, ask yourself the following questions.
- Do I want to invest in different markets or stay local?
- Do I want to focus on the value of my portfolio?
- How many properties do I need to buy in order to reap a profit that exceeds my expenses?
- What do I hope to achieve? Higher monthly cash flow, more stability, or a combination of both?
These questions are important as they help you decide the direction you need to go in order to scale your portfolio. It’s important to understand your goals first and then work to put plans in place to achieve them.
Most real estate investors start out by owning a rental property or two. They quickly find out that real estate investing is quite lucrative and want to buy more properties. It’s a lot of work building a sizeable portfolio, so be sure you commit to memory the tips outlined above.