7 Ways To Scale Your Rental Property Portfolio-min

7 Ways To Scale Your Rental Property Portfolio

Property investment is one of the excellent ways to earn profit and establish wealth. After acquiring your first rental property, you might be eager to move forward in establishing a more profitable portfolio. Doing so will require you to consider a few things. Before you start to scale your rental property portfolio, it’s crucial to gain experience in the real estate industry. An ideal approach is to start small, which is a good way to learn. In case you fail, it’s on a smaller scale rather than a significant one.

It’d be best to fully understand how the industry works before taking giant steps. Property investment is a highly profitable way to earn money however, it is also quite risky if you don’t have a good strategy. Once you’re all set to move forward in the real estate industry, there are certain things you can pay attention to in order to improve your portfolio. Here are several ways to scale your rental property portfolio if you don’t know how to proceed.

1. Decide On A Straightforward Strategy 

Depending on your specific objectives, whether you want to maintain a steady cash flow or increase the value of your property, consider diversifying your investments as you’re likely to benefit from both strategies. The strategy you’ll use must be clear but has room for modifications along the way in case changes occur in the market. Adapting to changes is a fundamental part of a good strategy to reduce risks as much as possible.

“Where your capital allows, you can explore acquiring rental property portfolios and get the benefits of economies of scale,” comments Ruban Selvanayagam of homes portfolio buying / auction firm Property Solvers.

2. Work With A Property Manager 

When your property portfolio is growing, you might lack time to manage them all properly. Depending on the market you’re focusing on, it might be best to work with a professional property manager. If you’re going to hire one, most companies typically charge a certain percentage of your monthly collected rent for their services.  

A professional manager will tackle various tasks, including the screening of tenants, rent collection, scheduling repairs, avoiding any violation of the local ordinances, and many more. If you want reliable assistance in managing your properties in Canada, checking out a reputable property manager in Toronto would be a good starting point.



3. Boost The Value Of Your Properties 

Improvements or renovations on your properties can help increase both the value and the rental income you’ll gain. If you want to gain better profits on the properties you’ll invest in, consider checking out those that need work since they’re likely available at discounted rates.

Investing in these properties and working on the necessary renovations will boost their value. With improvements, you’ll effectively increase the rental income and your equity, which you can use to purchase more properties.

4. Diversify Your Rental Property Portfolio

Real estate investors diversify their property portfolios to help mitigate the risk. Spreading your investment is one of the ways to minimize any loss in case a downward trend in the market occurs and still earn an income.

You can bring variety to your portfolio by investing in various properties and strategies such as residential, commercial, or flipping. Additionally, you can even invest in different locations where there might be new opportunities available. Investing in different properties will also allow you to observe which type of property is more profitable in which location. This can help you plan your future investments accordingly. 

5. Maintain Good Recording

One of the ways to scale your rental property portfolio is to maintain good records. Maintain accurate documentation of all your transactions, especially the expenditures for both general budgeting and tax purposes. Knowing your previous spending habits can help you scale more effectively since you’re well-aware of the financial benchmarks you need to reach before obtaining a new property. 

6. Manage Your Time  

Acquiring more than one property can be lucrative for you, but it’ll demand more time, especially management. Hiring a property manager can help you immensely in managing your various projects. However, working with a property manager might not be enough depending on the number of properties you have. If you’re already working with a property manager and can’t seem to manage well, there are additional ways to save time.

You might want to employ the services of a real estate accountant to help you with all the financial issues or money transactions. If your problem seems to be related to the payments of the rent and the tenants, you can also utilize an online rental payment software to minimize late payments and undesirable tenant interactions. Delegating responsibility will provide you with more time to focus on your core tasks such as running your business in the way you want and reaching your objectives.

Set Aside A Budget For Repairs And Maintenance 

When a property is over 15 years, a replacement might not be a good move anymore. When you’re facing similar issues with any of your rental properties, you need to be ready to deal with them right away.

With this in mind, having a budget for repairs or maintenance is essential. Additionally, overlooking or ignoring major repairs might only lower your chances of finding tenants and eventually result in higher expenses if neglected for a long time. Some of the extensive budget repairs you need to be ready for include roof replacement or HVAC replacement.



Final Thoughts on Scaling Your Rental Property Portfolio

The real estate industry is challenging on its own. When the number of properties you invest in continues to grow, the challenge of effectively managing your business grows as well. Every property investment has its share of challenges that’ll help sharpen your skills and know-how in the real estate industry. The experience you’ll acquire, along with these ways to scale your portfolio, will significantly help you maintain your properties effectively and earn a good income from your rental properties over time.

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