When it comes to expanding your rental property portfolio quickly, the first thing real estate investors think of is money. While monetary limitations will prevent portfolio expansion, they can be worked around. What is more important is how well you plan the strategies needed to scale your portfolio. Here are 10 strategies that can help you scale quickly in Broward County.
1. Choose Longer Mortgages on Current Properties
When you choose to go with a 30 year, fixed-rate mortgage instead of a 20 year or a 15 year fixed rate, you end up paying a lower interest rate and subsequently less per month. While this means it takes longer to pay the property off, it leaves you with more money to reinvest from month to month.
2. Look Into Hiring a Property Management Group In Broward County
As you acquire more properties and scale up your portfolio, you are going to need help in managing them all. This is where a property management group in Broward County is going to help you immensely by collecting rent payments, arranging for repairs to be done to apartments or the building, and screening tenants to ensure they are a good fit for the property. While you will lose a percentage of your monthly collected rent to the property management group, it helps you avoid major issues and keeps you in line with local rental laws.
2. Avoid Lifestyle Creep & Reinvest Into Your Business
While it may be tempting to spend your income to improve your quality of life, it is better to live frugally and reinvest the extra cashflow into more properties. You will need to account for vacancies and property repair, so save for these kinds of scenarios.
3. Network & Network Some More
In real estate, networking is an indispensable tool you can use to not only learn more about what works and what doesn’t, but it will give you access to reputable resources. By networking, you can track trends, learn about new developments, and expand your knowledge base.
4. Get In the Know With Contractors
Properties need repairs and these can be costly. Being in the know with contractors that you can trust to get the repairs done in an efficient, cost-effective, and trustworthy manner is invaluable to your portfolio. It prevents minor repairs from turning into large undertakings and helps you deal with emergencies promptly.
5. Understand That You May Need Alternative Funding
As you scale your rental property portfolio in Broward County, you will end up with quite a large debt to income ratio. This may make getting conventional loans difficult. Instead, look into expanding your options when it comes to alternative lending so that you don’t hit a roadblock in being able to acquire a new property when a fantastic opportunity shows itself.
6. Refinance When It Is Favorable
Refinancing your current properties will help you gain more favorable loan terms. This can help free up more resources that can be reinvested into expanding your portfolio.
7. Keep Clear & Meticulous Records
While you should keep clear and meticulous records for tax purposes and budgeting, it provides a clear path of understanding when it comes to spending habits and limitations. Being able to go back and take a look at the records gives you a good idea of what type of benchmarks you need to hit before you can acquire a new property for your portfolio.
8. Study the Target Market & Don’t Bind Yourself to One Market Segment
Do a deep dive into your target market and understand what type of tenants you are catering towards. Make sure to look at how desirable the area is, what the median income is, and what type of jobs are available. This will help you find long-term tenants. Also, don’t bind yourself to one geographic area as this will prevent you from diversifying your portfolio. You want to have multiple investments across several regions so that you are resilient if a disaster happens in the area (think job loss or natural disasters).
9. Consider Using Private Lenders
While you will be charged higher rates, a private lender will be able to offer you a loan type that you can’t get anywhere else. They can also provide loans quickly, with less documentation, and may be able to cover 80-90% of the purchase price. Private lenders are excellent for helping you secure a property swiftly in Broward County.
Keep in mind that with every new property you acquire, the more difficult it will be to manage the portfolio. It is important to take your time in planning out the strategies you will use to scale your portfolio so that as you acquire new properties, you can maintain them efficiently. Look into private lenders, high-end and reputable contractors, and make sure to network with those who have already found success.