With the market as strong as it is, this is an excellent time to be thinking about your investment goals and what you can do to grow your portfolio.
Many rental property owners are content to collect rent on one or two properties. However, if you can really scale your portfolio and increase what you own, you have the potential to establish some impressive financial wealth.
Here are five tips that will help you grow your Atlanta property investment portfolio.
1. Always Work with an Atlanta Property Manager
As your investment portfolio grows, you will find that you require the expertise and resources of your Atlanta property management partner even more. If you’re not already working with a great management team, don’t try to grow your portfolio without talking to a local expert. Your property manager is well-positioned to help you identify opportunities and set expectations. You’ll know how much rent you can expect to earn if you buy new homes and you can get an idea of where the major trends are shifting in both the sales and rental markets.
2. Leverage What You Already Own
If you already own a profitable rental property, you can leverage the equity to grow your portfolio, either through acquisitions or refinancing. Use the wealth you’ve already created to buy more property and increase the value of your combined assets. When you borrow against the equity in the home you already own, you don’t have to spend the cash you have available to buy the next property. Your down payment is the equity you already own.
3. Grow Your Portfolio with Acquisitions
Investors want to know when they should buy, and you should actually be prepared to buy any time you find the right opportunity. The market’s strength will play into how you structure and negotiate your deal, but it’s always a good time to invest in Atlanta real estate.
We recommend you buy whenever you have the opportunity and when you find a property that meets all of your investment criteria. When you or one of your partners finds a property that meets your criteria and complements your existing portfolio, but it. Leverage your buying power to acquire as many properties as you can.
4. Consider Diversifying Your Investments
When you’re growing a portfolio, it doesn’t hurt to think outside the box. If your entire portfolio is comprised of small apartment buildings, consider investing in a few single-family homes in good neighborhoods. If you only invest in residential real estate, explore the options for investing in commercial real estate. You can diversify the way you fund your purchases as well.
Look for ways to try something different. Maybe it’s a new market or transitioning some of your properties to short-term rentals instead of long-term leases. There’s a lot you can do when you decide take a few steps outside of your comfort zone.
5. Increase Your Portfolio with a 1031 Exchange
A great way to leverage the investment properties you already have is with a 1031 exchange. Under this program, you can sell one property and then defer the capital gains taxes on it by investing the proceeds into another property (or several properties) that are similar. The word similar in this case only means that it has to be another income producing property.
This is a good way to unload an investment that may not be performing the way you want it to. Or, you can increase the size and strength of your portfolio by selling one single-family home, for example, and buying a couple of duplexes. There are a lot of options.
We can help you increase the value of your current portfolio by growing it and looking for the right opportunities. If you’d like to talk about this, please contact us at Property Services of Atlanta.