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Expanding Your Investment Portfolio? Tips from Property Management & Real Estate Experts

Expanding Your Investment Portfolio? Tips from Property Management & Real Estate Experts
Expanding Your Investment Portfolio? Here Are Tips from Dallas Fort Worth & North Texas Property Management & Real Estate Experts - Article Banner Now is a great time to think about expanding your real estate investment portfolio. As you have likely noticed over the last year or two, those properties you buy and hold will steadily grow in value, and sometimes that growth will be faster than expected.  Right now, there’s a huge demand for rental real estate in Dallas Fort Worth, and the entire north Texas region.  More and more people are moving into the area, and most of them are looking to rent instead of buy. As the sales market continues to remain competitive, the rental market is strong. Rental values are increasing and inventory is low, setting you up for high vacancy and retention rates.  As you’re thinking about your long-term and your short-term financial goals, you need to know the best way to expand your investment portfolio. If you don’t have established goals and a clear strategy for achieving those goals, you’re not going to know how to look for the right opportunities and where or how you should buy your next rental home.  We have been helping investors manage their assets in the Dallas Fort Worth & north Texas rental market for years, and we have found that real wealth is created when you expand your investment portfolio. It doesn’t matter if you have one property or 10; consistently adding assets will give you an opportunity to earn more. Here are some of our best tips for local or out-of-state investors who are interested in growing and expanding their portfolios.

Expand Your Portfolio with Real Estate Acquisitions

Investors are always asking about the best time to buy, and you should actually be prepared to buy any time you find the right opportunity. The market’s strength will play into how you structure and negotiate your deal, but it’s always a good time to invest in Dallas Fort Worth real estate.  Some investors are put off by the current market because of rising prices and low inventory. But, remember that, unlike other buyers, you’re looking for rental properties, not the home you’re going to live in. This opens up the market for you and allows you to grab some great deals while others are hesitating. We recommend you buy whenever you have the opportunity and when you find a property that meets all of your investment criteria. When you or one of your partners finds a property that meets your criteria and complements your existing portfolio, but it. Leverage your buying power to acquire as many properties as you can.  Acquisitions are the easiest and fastest way to expand your portfolio. If you have the capital to acquire a new property or a handful of new properties, take a look at the market and make some decisions about what you need to diversify and expand your portfolio. 

Expand by Diversifying Your Real Estate Holdings 

Another great tip when it comes to growth and expansion: diversify your portfolio.  This will mean different things to different investors. Here are some examples of how to do it:
  • If you own primarily single-family homes in HOA communities, this might be a good time to look at some multi-family units or a small apartment building. 
  • Consider commercial spaces if you only own residential property. 
  • New markets are also a great way to diversify. If all of your properties are in Dallas, consider looking at neighborhoods like Sherman and Denison. If you’ve never invested in north Texas before, talk to a local Dallas Fort Worth property manager about the opportunities that are here. You’ll get a lot more for your money than you will in more expensive markets. 
Diversifying your investment portfolio will do more than add to its strength and profitability. It will also protect you from the risk you take on when all of your assets are in a single class of property or a single geographic market.

Remember Your Portfolio is a Business

You have to buy the right properties, and the right properties will make financial sense.  One mistake that a lot of investors typically make when they’re growing their portfolio is to buy anything and everything. That’s not a good strategy. You want to find an investment that will bring in some great short-term cash and long-term returns. You want a home that tenants will be interested in renting.  Look at every potential acquisition from the standpoint of a potential tenant. Will they want to live there? Will they be willing to pay the rent you will ask?  It’s about quality, not quantity when you’re expanding your portfolio. Keep the emotions out of it, and focus on smart business decisions. Don’t buy high-priced homes or properties that need a lot of work.  Think strategically, and make a business plan. 

Real Estate Investing: Grow with a 1031 Exchange

Income Producing PropertyA great way to leverage the investment properties you already have is with a 1031 exchange. Under this program, you can sell one property and then defer the capital gains taxes on it by investing the proceeds into another property (or several properties) that are similar. The word similar in this case only means that it has to be another income-producing property.  This is a great way to unload an investment that may not be performing the way you want it to. Or, you can increase the size and strength of your portfolio by selling one single-family home, for example, and buying a couple of duplexes. There are a lot of options.  The best strategy for earning as much as you can on your Dallas Fort Worth real estate investments is to hold onto them for as long as possible. There’s not a lot of money to be made in buying and flipping houses in this current market. We recommend you settle in for the long game. Buy some great, high-quality properties with excellent earning potential and hold onto them. You’ll earn more cash flow and you’ll increase the returns you earn in the long term.  Would you like to talk more about your investment goals and how to expand an existing portfolio? We love to strategize with investors. Please contact us at OmniKey Realty. We work with rental property owners in Dallas, Fort Worth, and other North Texas communities like Sherman, Denison, and Greenville.