A diverse investment portfolio is a strong investment portfolio, and if you’ve been looking for ways to earn more money on your rental properties, we have some excellent ideas for how to scale your portfolio of investments.
Rental homes will earn money for you in both the short-term and the long-term, but in order to establish real wealth and leverage truly passive income, you need to keep building your portfolio. This might mean additional acquisitions for some investors, or it might mean adding value to the properties you already own.
There are different ways to scale your rental property portfolio, and we’re here to share some strategies for growth and expansion.
Evaluate and Establish an Investment Strategy
We believe diversifying a portfolio will help you scale it. However, you need a strong starting point and a proven foundation.
What’s your investment strategy, and how does that strategy help you reach your goals?
Answer those two questions before you move towards growing your portfolio. Otherwise, you’ll be unfocused and grasping at any opportunity that presents itself, whether it fits your goals or not.
Some popular strategies investors are using to scale their portfolios include:
BRRRR (buy, rehab, rent, refinance, repeat)
Long-term rental properties with lease terms of a year or longer, which you hope to renew.
Short-term rentals and vacation rentals.
Evaluate your current investment strategy with your goals and what you want to achieve with scaling your rental property portfolio. This will help you determine the best way to proceed.
Diversifying Investment Portfolios
Diversifying your portfolio of rental properties can help you scale it and reduce the risk that you take on every time you buy and rent out real estate. If you own single-family homes only, consider buying a small apartment building with six or eight units. If you only rent out multi-family units, think about investing in a single-family home.
This will help you earn more and spread out your risk. If the market shifts and there’s a larger demand for one type of property over another, you’ll be well-positioned to attract qualified residents and higher rents.
Financing Strategies for Scaling Investment Portfolios
For many investors, one of the biggest barriers to scaling your rental property business is the financing that’s required. Can you leverage the properties you currently own? This will help you grow and expand.
There are several ways to finance your expanding portfolio, including traditional mortgages, hard money loans, private loans, and creative financing options like seller financing and 1031 exchanges. Explore your options and determine which financing options align with your business goals and investment strategy.
Improving the Properties You Own
Acquiring additional investments is perhaps the fastest way to scale and grow a portfolio. However, when you can maximize the earnings on the properties you already have, you’re also investing in growth and expansion. If you don’t want to invest in a new property, improve those that you already own. Renovations, additional income-producing services, and resident retention can all contribute to a better bottom line and a stronger investment portfolio of rental properties.
Scaling your rental property portfolio requires careful planning, critical thinking, and research. It also requires a strong team of professional experts, such as Sacramento property managers. We would be happy to evaluate where you are and where you want to go with your investment portfolio. Please contact us at PURE Property Management.
