Back Home8 helpful tips to scale your rental portfolio
Real estate is a lucrative business when you know how to navigate it. But you probably know this if you’re here, and chances are, you’re looking into expanding your real estate venture. It’s the next natural step if you’ve already established your real estate business, with a steady stream of income on the side. Growing your portfolio, however, is not a walk in the park. The process also takes time, but reaping the benefits will make everything worth it. Here are some tips to help you scale your real estate portfolio.
Be knowledgeable In the world of real estate, it’s important to continuously invest in professional development to keep abreast with market trends and industry practices. Attend real estate seminars, workshops, and networking events to expand your knowledge on investment opportunities, market drivers, financing, and other important matters. Being an expert in what you’re doing will give investors the confidence to trust you with their money. By staying informed and adaptable, it’s easier to navigate the ever-evolving market conditions and stay in a position primed for long-term success.
Have a reliable team Scaling up requires having a good team that works in sync to meet your goals. Surround yourself with reliable professionals who handle an array of tasks, from the menial to the important. They should be able to handle paperwork, communicate with investors, do follow-ups, and tackle any issues and concerns from the stakeholders. It’s important to build rapport not only with investors and shareholders, but also with your staff because trust is an important foundation in building good business.
Venture into new areas When scaling your rental portfolio, consider expanding into new areas. Identify market segments with a strong potential for growth and opportunities for investment. Do research on which areas have high demand for rentals, and the seasonality of demand. While it’s easier to just focus on one area, expanding your portfolio involves taking risks and stepping out of your comfort zone.
Build relationshipsIt’s nearly impossible to scale up without building a network of contractors, realtors, financial agents, and investors you trust. So, take your time to forge strategic partnerships with reputable contractors, Realtors, and financial institutions in each geographic area you’re venturing into. Doing so helps you streamline operations and access valuable resources. When you establish good relationships with local Realtors, they are more likely to give you access to pre-market offerings that will benefit your business. The same goes for contractors and financial agents.
Diversify If your current rental portfolio comprises only one type of property- such as single-family homes- expand into other property types to attract a wider range of tenants. Assess the possibility of having a combination of commercial and residential properties. If there is enough capital, mixed-use apartment buildings or condos are great options for expanding a rental venture. It helps to diversify your portfolio in order to mitigate risks and spread them across different markets.
Consider desirability In order to maximize profit, it is important to understand why tenants would choose one type of property over another. Try to discern why a family would choose one home over the other—is it the location? Smart home features? Amenities? Whatever it is, this skill takes both experience and knowledge, and is key to determining how to build a rental portfolio. Understanding what factors drive tenants to choose a property to rent will allow you to build a clearer picture of what you want to pursue.
Be accessible Investors, such as you, are busy people and to them, time is gold. They will quickly lose interest if they have to repetitively input data or give out the same information at every step of the process. Show people that their time is valued by making it easier for them to conduct business with you. It helps to have a portal that compiles all the needed information, and a streamlined process so that it’s easier to communicate and resolve any concerns down the line.
Streamline property management A key to scaling your portfolio is to have efficient property management. Having streamlined property management means optimized administrative tasks, giving you more time to grow your portfolio. Good property management will also foster investor and tenant trust, allowing you to build a relationship that will last in the long run.
