Real estate is one of the top things you can invest in to grow your passive income. According to Investopedia, around 34% of people believe real estate is the best long-term investment. Whether you're new to investing in real estate or have several properties, it's important to understand portfolio management.
This blog will cover our top three investment portfolio tips to help you maximize your investment. Discover how to efficiently manage all of your assets to reduce your risks and increase your income.
1. Find Your Real Estate Investing Niche
There are two different types of real estate properties you can invest in: commercial or residential. Some investors choose to purchase both types of properties.
Examples of commercial properties include:
- Retail spaces
- Office buildings
- Multifamily apartment complexes
- Warehouses
Keep in mind that these kinds of investments require a substantial amount of financial investment at the start. They do have the potential to generate major returns for your portfolio. Commercial properties typically have longer lease durations.
Residential real estate investments are typically more accessible to new property investors. That's because they have a lower entry cost than other kinds of properties. Key considerations when investing in residential properties include:
- More maintenance
- Frequent turnover rates
Once you establish what properties you want to invest in, you can determine your long and short-term financial objectives and intended return on investment.
2. Determine if You Want to Flip Properties
House flipping refers to purchasing a property at a low price, fixing it up, and selling it fast for a profit. These properties are typically in need of many repairs, allowing you to buy them for significantly lower than they may be worth.
However, pursuing this route for property investment requires an understanding of the following items:
- Renovation costs
- Knowledge of the real estate market
- Quick execution to maximize your profits
You'll need a network of skilled and reliable contractors if you want to pursue this strategy. You want them to have the ability to make renovations that not only boost the value of the property but are also cost-effective.
One thing you'll need to keep top of mind if you want to flip properties is portfolio risk management. Many financial risks come with this tactic, such as market fluctuations and unexpected renovation problems.
3. Explore House Hacking for Your Rentals
House hacking is another portfolio management strategy you may want to implement. This tactic requires you to purchase a property that has multiple units. Reduce your living expenses by living in one of the units while you rent out the others.
Some of the benefits of this option include:
- Income from rentals can offset mortgage costs and other expenses
- Live with no or minimal housing costs
This is a great option for those just getting into investing in real estate.
Maximize Your Real Estate Portfolio Management With PMI US Southwest
Real estate portfolio management doesn't have to be complicated. Working with a company that understands the nuances of the market and what would be a good investment is key. That's where PMI US Southwest can help.
Our experienced team is here to not only help you find properties, but manage them once they're purchased. Our ROI calculator will help you determine if a property is a solid investment. Contact us to schedule a consultation for financial planning advice.
