If you're feeling ready to develop the breadth of your portfolio, then growth is probably at the forefront of your mind. Adding the right investment properties ends up being the most critical element associated with creating a balanced portfolio, but finding them is far from simple.
An expert Virginia Beach property management team can offer the strategies you need for finding the next ideal rental property—and can help you get started on the hunt. This can be an excellent benefit for you as a property owner to make a move from having a property or two to really building a portfolio. When you want to grow, experience is one of the best resources you can have on hand.
Foreword: While we are experts in full-service property management, this blog is not legal counsel. If you need live support, get in touch with the Rent Estate™ Advisors at Renters Warehouse Hampton Roads!
Research Drives Every Aspect of a Healthy Portfolio
There isn't a 'magic bullet' when it comes to finding a great rental property—unless you count time and sustained research into the Virginia Beach rental market. You can prepare yourself to recognize a great deal when you see one, though!
- Learn whether renting or buying is most common in the neighborhood where you want to own property.
- Learn about upgrades that drive rent rates up: Do people prefer a certain number of bedrooms in your market?
- Learn how fast properties are selling—and whether it is a seller's market or a buyer's market when it comes to real estate.
All of these factors are also going to be influenced by your interests as an investor. If you want to invest in apartment buildings, you'll have a different set of concerns than if you are focused on single-family homes.
An excellent Virginia Beach property management company can help you connect your own set of guidelines for what you want in your portfolio. They can also analyze the kind of demand and supply that the Virginia Beach area actually provides.
Consider a Limited Liability Company for Protection
When you've left the realm of just one or perhaps two investment properties, your business really needs some protection from possible litigation. You might consider a formalized business entity even when you start the process of rent collection and tenant screening on your first property!
- A Limited Liability Company formalizes the difference between your personal assets and the assets that belong to your property investment business, making it easier to keep track of your money for taxes.
- If you ever were to experience a lawsuit, an LLC would help you to protect your own personal wealth since, in some cases, an LLC can help reduce your liability to only your business assets.
- You'll want to talk to a lawyer or your tax accountant to make sure that an LLC (rather than a sole proprietorship, partnership, or S Corp) is the right fit for you.
- However, figuring out what business entity makes sense for your circumstances is a key to growing your real estate portfolio with appropriate risk management.
Avoid 'Money Pits' With Turnkey Investments
It can be tempting to grab a 'great deal' fixer-upper as one of your first properties—but even experienced fix-flip investors are occasionally burned on these deals.
Even an incredibly inexpensive home can turn out to have so much structural or systemic repair needed that the money you put in will never materialize in a high rental rate or resale value. This is what makes a property a money pit: you can throw money in, but you can't get it out!
Of course, many fixer-upper homes are not this way. However, with a small-scale portfolio, you need each investment you do make to be secure and stable. When you have a newly-constructed or like-new home to rent out, you can advertise it immediately after purchase, resulting in cash flow from very early on in your experience.
You will pay more for the mortgage since it's a nicer property, but you'll also know exactly what you're getting, rather than the question mark of a fixer-upper. Once you've got a turnkey property or two earning steady rental income, branching out into fixer-uppers carries less overall risk and helps you grow your portfolio in a safer way.
Hire Full-Service Property Management to Run Day-to-Day Operations
As your rental property portfolio expands, taking care of all of the details (like maintenance issues, rent collection, and property turnover) becomes a more and more time-consuming task.
You may find yourself having to decide between spending time looking for another great deal on a property or getting to the daily tasks of checking in on properties, responding to maintenance requests, and navigating tenant placement—all with a full-time career!
By hiring a Virginia Beach property management firm like Renters Warehouse to handle the particulars, you'll get more opportunities to focus on the elements of growing your real estate investments that you actually enjoy! Part of developing an investment portfolio sustainably is working at a reasonable pace—not growing too quickly or too slowly.
Having a partner in the form of a full-service property management team can give you guidance and some back-up when the progress in your business lags or multiplies, taking a lot of the pressure off and smoothing the course to long-term wealth. You can also learn more about how to sustainably grow when you download your copy of our free resource for growing your portfolio!