Hi this is Tanya with Envy Property Management. In today’s video I want to talk about ways to grow your real estate investment portfolio. Maybe you’re already a seasoned real estate investor or perhaps you’re just now getting your feet wet in the real estate investing world. Either way, acquiring real estate is key to earning passive income and becoming your own boss.
Real estate investments are one of the safest and most effective ways to build wealth. While the real estate market may go up or down, at the end of the day people will always need homes to live in.
There is no step by step process to investing in real estate. Some variables to consider are, the condition of the local economy, access to capital, and strength of competition.
With all this in mind, I came up with 5 strategies to grow your rental property portfolio as quickly as possible.
1. Buy Your First Property.
It’s never too late to take a leap of faith and purchase your first piece of real estate to begin your investment portfolio. This is the most important step you will take when you’ve decided to begin investing. Don’t rush when choosing your first property, but don’t take too much time either. You don’t want to miss out on the perfect opportunity because you were dragging your feet. Your first property purchase will be a learning experience no matter what. Mistakes will be made and things will be remembered for your next real estate purchase. Always keep in mind when purchasing investment properties, your intention is to build your real estate portfolio, not actually move-in to the home yourself.
For your first purchase, consider acquiring a property where potential improvements are easy to spot. Start with less expensive properties to become more knowledgeable about how real estate investment works. Once you’ve had your first successful experience, move on to larger deals.
At Envy Property Management, we always encourage investors to call a professional property management company to do a rental analysis for you before your purchase. They will be the most knowledgeable about the area the home is located in and what kind of rent you’re looking at collecting. We’ve taken many phone calls from investors who hired their management company after their purchase, only to be surprised that rent values for that area are much lower than what they were told by their agent.
2. Leverage Your Equity.
Now that you’ve acquired your first property, you can quickly speed up the growth of your portfolio by leveraging the equity of your investments. For example, if you purchased a property for $250,000 and, after making improvements, the appraisal value comes back at $350,000. You now have $100,000 in equity you can access by selling the property and reinvesting it in an even bigger deal, or you can borrow money against the equity to purchase another investment property. Be careful with this approach, however, you don’t want to take on too much debt! Make sure you’re always maintaining a positive cash flow to repay your equity loans.
When you hire a professional property management company like Envy to manage your rental property, you’ll receive monthly and yearly statements to easily identify whether your property is cash flowing or not.
3. Leverage Resources For Off-Market Properties.
“Off-market” is a real estate term referring to properties that are for sale but not advertised on the Multiple Listing Service (MLS) or other public resources. Brokers will sometimes create enough interest in a property just through word of mouth or privately on their network. These homes can occasionally be undervalued with very motivated sellers. Investors often find off-market properties by networking directly with real estate agents or attending real estate auctions. Do what you can to network with the right agents and brokers to bring these deals to you first.
4. Reinvent Cold Calling
Many investors and real estate agents have stopped cold calling people entirely because it can be time-consuming. However, their loss could easily become your gain. Cold calling is beneficial because it helps you cut out the middlemen and communicate directly with potential sellers. Always remember, first impressions are crucial, be sure to have a solid calling script prior to calling. But if you’re prepared with a confident introduction, you might be able to find that perfect diamond in the rough.
5. Hire a Professional Property Management Team
The biggest and most important step in growing your real estate investment portfolio is to hire a professional property management team like Envy Property Management. The ability to scale your business will be severely limited by the hours you will spend trying to manage your rental homes by yourself. A good property management company will be a crucial asset and the most important player on your team. Not only will they keep your investments up to market rent, they’ll also completely remove all the headaches and frustrations that come with owning your own investment properties. The savviest of real estate investors understand the value and importance of hiring the right management company for their rental properties.
That’s it for today’s video, I hope these 5 tips to grow your rental property portfolio were helpful. If you want help choosing a Northern Utah property management company with years of experience, please contact us at Envy Property Management. We are a wealth of information when it comes to professional property management of your investment property. You can always ask us for some valuable tips and extra resources to make the choice simple and painless. Give us a call today, 801-337-4337 or visit our website at envypm.com where you can easily view our three-tiered pricing plan, so you can choose the package that best fits you and your needs.
