Growing your portfolio is a delicate balance between risk and reward. Experienced investors with successful portfolios have a bit more leeway in this department.
- With an extensive portfolio, you can tackle a fix-and-hold property that needs more work upfront than a turnkey home.
- As a seasoned investor, you have more experience spotting a “lemon” investment in Washington DC—or maybe you’ve been burned by one in the past.
- Robust portfolios can “float” a riskier investment with the income from multiple properties that are already producing consistent returns.
Keep in mind that the above strategies have been learned after negative past experiences—or at the cost of an investment. When your portfolio is more extensive than five or six properties, you have more room to shelter your returns from an investment gone wrong.
However, if you’re an investor with a smaller portfolio—or your investments are currently troubled—you can’t afford to take these kinds of risks when it comes to protecting your long-term wealth. This is where picking surefire investment properties in Washington DC can be a huge support for a developing portfolio. Choosing the right properties is how a portfolio grows, after all!
How can you know which properties are right for your growth? Part of our mission as an expert property management company in Washington DC is helping the investors we work with pick winning properties. These properties yield reliable income to build the foundation for future investments.
Here are some tips from the pros when choosing the next investment properties in Washington DC for your portfolio.
Every Property Isn’t a Winner—That’s the Truth
Sometimes, you see a property and fall madly in love—or at least, you get this feeling like it’s “the one” for your portfolio. However, not every property and your portfolio were meant to be! What seems to be a match made in heaven is actually a money pit—or health disaster—waiting to happen.
When you’re just starting as an investor, it might be tempting to invest in a fix-and-hold property, as we mentioned above. Fixer-uppers appear to be a bargain on the surface—but they may come with unexpected and expensive baggage.
- As you’re growing your portfolio, avoid risky fix-and-hold homes that may have hidden—and costly—damages. Without the stability of a more extensive portfolio, these projects can risk your financial freedom! This includes “as-is” foreclosure homes.
- If you’re intent on adding a fix-and-hold property to your portfolio, choose one that only needs minor repairs—and get a thorough home inspection before purchase. A home inspection is designed to protect you—as the investor—from seriously expensive fixes that could make your next dream investment property a nightmare.
- Run the numbers: is this investment property going to net you the returns worth your investment? If your figures just don’t add up, move on to the next property on your list. Thorough research into the home and the local market it sits in are invaluable in determining if the property will yield a sufficient ROI.
As an expert property management company in Washington DC, we know the goal of Rent Estate™ is to reach financial freedom—not risk your long-term wealth. Waiting to take on riskier projects until you have built up a stable foundation of reliable income properties secures your income for the long haul.
Your research into a prospective property is one of the most crucial tips listed here. Often, a detailed enough inspection of the market and the history of a potential rental are enough to weed out investments that could tank your profits.
Don’t Let Your Feelings Interfere With the Facts
One key advantage of performing some in-depth research into the market surrounding your prospects is that it will provide you the numbers you need to assess the worth of an investment. However, this research needs to be based on the reality of what renters want.
What tenants are looking for in your investment properties is very different from what you might consider ideal in your own home. Personal preference can be a serious obstacle for investors when deciding on their next move. Knowing what tenants want and appealing to that audience when selecting a property is easier said than done! However, it gets easier when you work with an expert property management company in Washington DC.
A property manager local to DC has extensive experience in finding, screening, and placing tenants. They have an insider perspective on what renters expect out of your investment properties in Washington DC. While that exotic bathroom might be the stuff of your dream home, the market might tell a different story about what will rent for the ROI you need. A property manager can not only steer you away from a risky investment; they can guide you towards the right updates to get the right tenants.
You Don’t Have to Do the Work Alone!
Regardless of what stage you’re in as an investor, the right research is the foundation on which your portfolio is built. It takes time to learn the ins and outs of finding the right rental property. However, trial and error in real estate often results in getting burned.
At Renters Warehouse DC/NOVA, we believe the path to financial freedom should be low risk and worry-free! That’s why we offer investors access to powerful market research that they can use to pick the right properties the first time. It’s easy to get started, too! Just reach out to us to get your FREE Rental Price Analysis.
Not only can this tool help you find your bullseye price on your current rentals, but it’s vital to finding your next profitable property as well!
Don’t leave your investment portfolio to chance: we’re here for you!