If you’re aspiring to be a real estate investor or have already started, one of your goals may be to own multiple properties. This is a noble goal to achieve generational wealth and substantial passive income.
Other benefits of owning multiple properties include elevating your net worth and amassing a massive real estate portfolio.
However, owning multiple properties is a time-consuming and gradual process. It certainly doesn’t happen overnight and if you don’t take the necessary steps to maximize your current property investment, you won’t be successful in your goal to manage multiple properties.
In this article, we’ll discuss several steps you can take to help you start owning multiple homes around the world.
Always Buy Below Market Value
The trick to own multiple houses is buying them below marketing value. This means that you’ll ultimately have to be a great negotiator.
When bidding on real estate properties, only submit intelligently low bids. At first, you may miss out on home buying opportunities. Though, it’s important to realize that missing out on these opportunities will pay off later.
As time goes on, you’ll start to master key negotiation strategies and buy affordable properties without compromising your values. It’s much better to miss out on a home that’s overpriced than buying as many properties as possible to expand your portfolio.
Add More Value Through Remodeling
Another secret to owning multiple properties is to add more value to the homes you buy through remodeling. The principle behind this concept is simple.
When you buy a home below market value, you have more opportunities to renovate the property and sell it for much more than you would get if you bought an expensive home.
For example, let’s say you purchased a property for $30,000. Originally, the home was worth $45,000 until you talked the owner down.
With renovations, the home is now worth $120,000. If you would have bought the home for $45,000, you would have received a lesser return on investment (ROI). This speaks to the importance of remodeling every property you buy to make more money while building your portfolio.
Review Your Property Values
Property values tend to fluctuate over time. As you accumulate more properties, it’s essential to find out what they’re worth on a regular basis.
This way, you can learn if you have more equity to purchase more real estate properties. If your property values are collapsing, you can make the decision to renovate or sell.
Find a Great Mortgage Broker
If you’re going to start owning multiple properties, one of the first things to do is find a suitable mortgage broker. Partnering with a mortgage broker will help you to finance the properties you plan on buying.
Also, if you’re a loyal client to particular banks and credit unions, you may build great faith among these organizations. This will elicit more trust from these organizations and allow you to take more risks in building your portfolio.
Fortunately, there are several ways to find mortgage brokers that will work with you. If you want to take the unconventional route, you’re free to choose a private lender instead.
Learn More About the Real Estate Market
There is no getting around it. If you’re going to be a successful real estate investor, you’ll need to learn more about the real estate market.
Studying the real estate market will ultimately make or break your career. Knowing how the real estate market ebbs and flows will give you the insight you need to make accurate decisions for buying and selling.
It can also help you to foresee market crises and prepare appropriately.
Stay Up-to-Date on Market Trends
While studying the market is vital, staying up-to-date on current trends is arguably more important. For example, the coronavirus (COVID-19) pandemic has impacted the housing market exponentially.
If you’re planning to start a real estate portfolio or grow it, keeping your eye on how the pandemic is faring should be a top priority.
By doing so, you can learn more about governmental compliance, upcoming laws, and other issues that could affect your business. You can also make informed purchases no matter what state the market is in.
Create Positive Cash Flow
If you’re buying more turn-key rental investments, it makes sense for your cash flow to exceed your property expenses. This way, you’ll have the cash to maintain your existing properties and buy more homes.
At times, ambitious real estate investors will continue to pour money into disastrous rental projects, anticipating a profitable sell. The problem is that if you practice these bad habits, you’ll soon end up without any money to keep your properties running.
All of your real estate properties should generate positive cash flow. Regardless of the amount you spent on a rental investment, you should consider selling if its expenses are constantly growing.
Never Make Emotional Decisions
This can result in wasted time and valuable dollars. Only buy properties that will net you a positive ROI and cash-on-cash value. Don’t believe the myth that a property has enough “potential” to outweigh all its risks.
Chances are, you’ll be making an emotional decision without any hard evidence that your hard work will pay off.
Expand by Selling
You shouldn’t buy real estate properties to hold them forever. Sometimes, it makes sense to sell properties with depreciated values and exorbitant expenses.
When you sell properties, you’ll have the cash to expand and take advantage of more lucrative opportunities. In fact, your real estate portfolio can depreciate in value over time if you don’t begin to sell real estate properties that aren’t generating a positive ROI.
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