When many people become real estate investors and develop portfolios, they're going into this type of endeavor with the goal of leveraging their money. When a person invests, they're hoping to avoid the process of exchanging time for money. If you plan on building a real estate portfolio, know that it's not a completely passive stream of income. There is work involved. However, if you manage your portfolio correctly, it can serve as a major benefit to your net worth and more.
1 Get Clear on Your Strategies
There are so many strategies you can adopt in order to build your real estate portfolio. In fact, there are plenty of people who actually diversify their real estate portfolios. It's up to you to look at what you have access to in terms of education, capital, and other resources. Then, you can decide which route you’d like to take. Just make sure you get clear on your strategies. If you'd like to focus primarily on fixer-uppers that you can flip quickly, that's a popular method to consider. Wholesaling is another option to try. If you would like to buy and hold your real estate properties in order to rent them out to different tenants, this is another lucrative opportunity as well. The key is to know what you want to do. Become well-versed in the strategies that you plan to pursue. Then, as you develop the confidence and experience, you can branch out into other opportunities within the real estate market.
2 Automate and Delegate Certain Processes
Make sure that certain processes are automated or delegated. Automation allows you to leverage your time while accomplishing various monotonous tasks. If you have numerous tenants that receive payment reminders before the first of the month, automate that process. If there's a way to process rental payments, invest in those types of services in order to minimize your workload. It's even a wise idea to hire ICC property management to serve as the liaison between you and your tenants. Whether your tenants have maintenance issues, late rental payments, or other concerns, they can contact the property management company instead of burdening you with all of the tedious details. This is especially helpful as your real estate portfolio grows. You won't have the bandwidth to tend to every single need that each tenant has on a daily basis. By hiring the right people, using the right services, and automating a lot of your processes, you can manage your portfolio with a lot more efficiency and ease.
3 Invest in Relationships and Partnerships
As it relates to any facet of a business, relationships and partnerships will take you much further than you can go alone. Become intentional about building relationships with other real estate investors in order to learn and grow. Network in order to meet new people who can help you leverage the power of what you have. It's also important to develop relationships with people who can help you maintain your real estate portfolio. When you have rental properties, it's important to maintain the structural integrity of the buildings. It's also wise to maintain curb appeal, cleanliness, and more. You don't want to leave all of these details to your tenants. Tenants are notoriously terrible about keeping properties in good shape. This is why it's great to invest in relationships with people who can help you with tasks such as cleaning, lawn care, and plumbing. When you have a system that works like a well-oiled machine, it's usually because you've invested in amazing relationships that help you build your empire with integrity.
As you work to build and manage your real estate portfolio, become well-versed in the tax codes in order to avoid lawsuits, financial issues, and more. Do extensive research to understand how to protect your assets as you develop them. If you have an angry tenant who is ready to file a lawsuit, it's important to have your paperwork and documentation in place. If you don’t, that angry tenant holds the power to potentially take all of your assets from you. Make sure that you have a reliable accountant who can help you manage the financial side of your business. Even if you're well-versed in finances, it's always better to have someone show you ways that you can save money, expand your profit margin and build your portfolio even more.