Real estate investments are excellent opportunities for building wealth and enjoying passive income. However, you can’t buy one or two properties and then forget about them. You have to continue growing your portfolio so that it really performs for you in the short term and the long term.
How you grow your Berkeley real estate portfolio depends on your unique investment goals. There’s no one way to do it. Growth will depend on the economy and the current rental market as well as the competition that’s out there for good investment properties.
Stay flexible, but make every decision with your investment goals in mind. Here are five ways we recommend you increase the power and the value of your portfolio.
1. Consider Diversifying Your Investments
Every investment advisor will counsel you to diversify your portfolio. This eliminates risk, and it also encourages growth. When you diversify your real estate holdings, you’re able to take advantage of strong market trends in specific industry sectors.
If you have traditionally invested in single-family homes only, a great way to both diversify and grow your portfolio is by looking for opportunities to invest in multi-family properties or even an entire building. Perhaps some commercial real estate will help you grow. Consider options outside of your general comfort zone.
2. Look for 1031 Exchange Opportunities
A 1031 exchange comes with a number of advantages. You can defer your capital gains taxes, which is a huge benefit. You can also grow your portfolio. This is your opportunity to let go of a property that may not be performing the way you expected it to. Perhaps rental property maintenance costs are out of control or you’re having trouble finding tenants who want to live in that neighborhood. Sell it, and buy something that’s going to earn you even more.
3. Leverage Your Existing Investments
Encourage growth by leveraging the equity of your existing portfolio. When you can access equity in the properties you already own, you can use that money to acquire additional properties. It’s common to borrow against your equity and as long as you’re careful with the debt you’re willing to take on, you can use the rental homes you own now to increase the size of your rental portfolio.
4. Improve Your Existing Assets
Increasing the value of your rental properties is another excellent way to grow your portfolio. Growth does not always come with acquisition. You can earn more rent and increase your ROI when you make some cost-effective upgrades and updates to your rental homes.
In multi-family properties, consider an in-unit washer and dryer. This will allow you to collect more rent right away. In single-family homes, updated landscaping can provide better curb appeal and inspire interest from high quality tenants.
Hard surface flooring instead of carpet, new energy-efficient appliances, and even a fresh coat of paint can have an effect on your portfolio of rental real estate in Berkeley.
5. Network with Professionals and Experts
Finally, surround yourself with professionals. Make sure you’re in regular contact with agents, brokers, Berkeley property managers, and others who work in real estate services every day. You’ll find you’re more educated and more in touch with what’s happening in the market. This will allow you to identify new opportunities faster.
We can help you grow your portfolio of Berkeley rental homes. Contact our experienced team at California Pacific Realty.