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Posted 13 November 2020
Owning a house you bought for the purpose of renting, at first, might seem fun. You could try to make sure everything looks good. You can even stop by to greet the tenants. There’s nothing wrong with that until you find out that you are not making enough money.
Your tenant will call you anytime a little thing happens. Oh, there’s water leaking. Oh, there are roaches everywhere. In this case, you will probably never see a good return.
Just having one or two rented houses is like bringing a liability into your life. You won’t be able to sleep well; you are waiting for the rent money. You always hope nothing wrong goes wrong.
Come to think of it, the reason you bought the house in the first place was for passive income. Growing your portfolio is the way out. It’s a business, and you should treat it as such. If you do not progress, the competition will be bigger than you.
If you hope to have a portfolio of properties one day, you are already thinking the right way. Some people would conclude that having more properties will bring more problems. Of course, there will be more phone calls, rats, and even roaches.
Below is a list of ways that can help you grow your portfolio.
1. Don’t waste money
The property you buy determines if you’ll make a profit or not. I see people buy properties they can’t pay off. If you buy more than what the property is worth, you have lost money. In this article by Forbes, you will learn ways to avoid losing money in real estate. Some people buy fixer-uppers, that’s not bad, but you have to make sure you don’t lose money on the flip.
Why you shouldn’t lose money
Simply put, if you want to grow your portfolio, then you need money. With money, you can buy as many properties as you wish. You need to invest more if you’re going to win this game.
When to know you are making money
If a year goes by and you don't add more homes to your portfolio, you are losing money. I’ve come to realize that if you aren’t growing, then you are not making money. Whenever you add properties to your portfolio, then you are making money.
When You Should Sell Properties
I know some investments could turn out to be wrong, but you shouldn’t just sell them just because of the economy or whatever is happening around. In this blog post by Roofstock, you’ll see the best time to sell your property.
2. Work With Property Management Companies
If you plan to add so many properties to your portfolio, you need to work with a property management company or employ someone to manage your properties. I’ve seen some people who self-manage more than twenty homes. If you get to a point where you can’t sleep anymore because of one property or the other, then you need help. Some of these management companies have a flat rate, and it all depends on the property.
3. Choose The Right Tenants
I know watching those months go by, yet nobody has rented your property might feel like you are losing money. There are many reasons why you need the right tenant. I know there are agreements signed, but most people don’t adhere. You need a tenant that will work with you.
As a property owner, you don’t want any kind of person to rent from you. You need a renter that will stay in your property for many years, and of course, pay you. If you can find that type of tenant, then the chances of seeing many returns are very high.
4. Have Other Streams Of Income
When you start working with a management company, you will have the time to do other things.
You should know by now that having one source of income is not the way to go. I know focusing on something and building it up is very good, but you need something to support you while you do so. In this blog post by the PhysicianOnFire, the writer wrote about how he owned six rental properties and lost them.