If you own property in DC and want to increase your opportunities and build your income, it may be time to expand. In many areas, real estate is quite promising, offering opportunities for low-cost buy-ins that put you in the position of increasing your portfolio wisely. However, in a market like DC, they can be far harder to spot on your own: property values here are among some of the highest in the nation, and available properties are often oversaturated with potential buyers.
With this in mind, there are several facets of investing worth considering before you dive into acquiring new properties. With a bit of help and guidance, you may be able to make significant strides in growing your portfolio this year, as interest rates are currently low, even as buyer demand is up!
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When it comes to growing your real estate investment portfolio, consider these tips from the experts in DC property management!
#1: Work With Good Wholesalers and Other Investors
By far, the most essential insight we can offer to grow your real estate investment portfolio is to work with the right people. This premise applies to virtually any business model. Who you work with often defines your success within your business, and in real estate, this is critically important when you are looking for good deals and opportunities.
If you want to grow your real estate investment portfolio, you need to work with good wholesalers or fix-flip investors.
- These are the people who will be doing the leg work for you. They make it their work to find homes in decent areas that need some repairs but are otherwise worthy investments.
- They invest their money into the upgrades and updates to make these properties highly desirable. If you build a strong relationship with these wholesalers, you will have your pick of DC property options for your portfolio.
- While these investors need to make a profit, they are likely to minimize that margin if they are selling to someone they know in the industry who buys in bulk.
However, it’s worth keeping in mind that fix-and-flip is a very different mentality from buy-and-hold, and the renovations made in either category will reflect this. Buy-and-hold focuses on what renters look for in a home, while fix-and-flip looks for what homeowners want. This makes delineating your interests crucial when forging working relationships.
#2: Sometimes You Need to Look Outside DC
If you want to buy new properties, that can be hard to do within established DC neighborhoods if you expect to keep your costs in line with your goals. It’s easy to quickly rack up a very expensive rental if you want to acquire property in the district proper. However, you can still attract those who want to live and work in DC by purchasing property just outside of it in surrounding areas like Northern Virginia or Maryland.
Nearby Arlington, Virginia, and Silver Springs, Maryland, are just two examples where property is far more accessible (and affordable) while still providing proximity to our nation’s capital. Sometimes to win the game, you have to redefine the rules and look just a little bit outside of where you were hoping to buy to get the best ROI. It’s also a great way to diversify your portfolio a bit more as you’ll have access to a mix of homes, from single-family to multi-family properties.
#3: Improve Your Cost Structure
Another crucial element of portfolio growth is ensuring your costs are in line. Keep in mind that when you manage your costs well, you free up a significant amount of money to use for investment purposes.
- Are you paying close enough attention to your expenses?
- Do you have a good handle on your costs at this point?
- Do you need more insight into ways to reduce overall costs?
Often, making a few critical changes to your operational costs can free up a significant amount of funds to use to expand.
Estimating rental cost expenses can be a challenging aspect of owning property, especially if you are new to the game. Working with expert DC property management can not only point out where you can trim unnecessary expenses, but they can also deliver direct savings to you with their services.
#4: Hire a Professional Property Management Team
As noted, many of the concerns you may have regarding expanding your real estate portfolio can be alleviated with the help of a property management company.
- If you want to expand into the DC rental market, you need professional insight and support to guide you in your decision making.
- This includes insight into the current DC real estate market so you can buy with confidence. It may consist of providing you with rental research for the DC market as well.
- With property management rental research, you can easily compare what is in demand—and what is not worth your time.
Best of all, a property management company like Renters Warehouse can do all of the leg work for you! We can find you the right deal and opportunity based on the parameters you select. You do not have to put your time into the process of tracking down your next investment when we’re on your team!
#5: Sharpen Your Skills to Own More
Developing your own skills in real estate can help build long-term wealth. You may benefit from working with a financial advisor who can help free up some of your capital, so you have more to invest. You may want to turn to angel investors to pool your resources so you can invest further. You may even want to talk to friends and family about joining your growing portfolio business.
Why do this? The real estate rental market is thriving in many areas. This is very true for the DC market. If you want to grow your real estate business here, it pays to invest in the education necessary to make wise decisions. Some of this knowledge can be gained from working with a DC property management company that guides your choices and frees up your time. With this new freedom, you may be empowered to seek out other educational opportunities as well!
Once you find a potential rental property, the first step to take is to perform the research you need to find your property’s bullseye price to ensure you’ve picked a profitable rental! Thankfully, you don’t have to do this research alone or eat up your time investigating properties. Take advantage of our free Rental Price Analysis!