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How To Build A Rental Portfolio

Hello, property and potential property owners! Welcome to the RPM Distinguished Care blog, where we provide practical advice about property management! If you’re a return visitor, welcome back. We sincerely appreciate your support! RPM Distinguished Care specializes in managing successful rental properties in and around the Charleston area. We’re here to make your lives easier by giving you the resources you need to maximize profitability and have a successful rental property. We provide comprehensive property management services at every possible level. From advertising and marketing, to responding to applications, to inspecting and maintaining properties–there’s nothing we do not do. Further, we ensure tenant compliance, handle necessary evictions, and report directly back to you about revenue and profit potentials. We aim to make owning rental property as easy for you as possible, for as little money as possible. Check out the rest of our site to meet our team and discover what makes RPM Distinguished Care the best property management company in Charleston!


In our last post, we took a look at some of the most frequently asked questions about property management. When it comes to owning and renting out properties, there are a lot of areas to cover. This can feel overwhelming, especially if you are a new property owner. So, we compiled and answered some of these questions to the best of our ability. If you are interested in finding out what questions we answered, check out our last blog!


Today, we’ll be discussing how to create a rental portfolio. This is a great idea for investors, and it’s never too late to start putting together a portfolio. But what exactly is a portfolio in this case? A rental or real estate portfolio is very similar to a resume. It is essentially a collection of real estate investment assets, or a comprehensive document detailing your past and present investments. Most real estate or rental investors plan on owning more than one property, and having a portfolio documenting these properties can impact your long-term wealth. If you are interested in learning more about how to build a rental portfolio, you’re in the right place! Let’s get right into it. 


Investing in real estate can bring in extra income each month, comes with tax benefits, can protect you against inflation, and is a chance to build capital. The goal of real estate investing is to invest in properties that increase in value over time. Of course, there is also risk when it comes to investing– Sometimes real estate loses value over time. This is one of the reasons why it is crucial to do your research and find the best places to invest in real estate before you actually dive in. There are many options when it comes to real estate investing. For example, you can purchase single-family or multi-family homes, apartment buildings, or commercial properties. No matter what you decide to invest in, these properties can be added to your portfolio.


Before starting a rental or real estate portfolio, you should consider the expected time period that you intend to be investing before achieving your desired goal. So, make sure you have clearly identified your goal first. Building a portfolio will depend on your investment strategies and the “risk versus reward” approach you take to attain your goal. This is ultimately your willingness to lose some or all of your original investments in pursuit of your financial goals. It is important to keep in mind that no two portfolios are the same– They will differ based on the investor’s strategies, approach, and– of course– properties. A real estate portfolio highlights your accomplishments as an investor and serves as a way to find and acquire funding for future deals. To put it simply, your portfolio will have the ability to produce cash flow. Every portfolio should have an “objective”, whether it is to increase income, generate high amounts of capital, or hedge against inflation. If you’ve done your research on real estate investments, know how to increase a property’s value, how to manage tenants, and everything in between, then you’re ready to start building your portfolio.


When you begin to build a real estate portfolio, consider your investment strategy. The type of strategy you use will determine how fast you are able to build your portfolio. For example, partnerships are a great way to buy more properties in a shorter period of time, since you and your real estate partner are able to combine financial resources and split responsibilities. Regardless of the strategy you choose, it is important to understand exactly how it works and how it will contribute to the bigger picture: Your financial goals and how quickly you want to build your portfolio. You must also be able to adequately evaluate deals. What makes a good deal? To answer this question, you must consider factors such as the property location, population growth, local job market, and property taxes. 


You should also consider the types of properties you are investing in. Individual properties generate different types of returns over different periods of time. Think about how each property you invest in helps you achieve the objective of your portfolio. Multi-family homes, such as duplexes, are one of the best choices to build your portfolio quickly. Buying multiple properties of this type will help generate more income and result in faster growth for both your business and your portfolio. The same goes for apartment buildings; They are one of the best choices for real estate investment because they result in multiple sources of income. Ideally, you should look for apartment buildings in areas with a promising or growing job market and a high rental demand.


One of the most important things you should keep in mind is that your portfolio should be diverse. Having more diversification creates lower risk. Since there are so many cities in the U.S. with their own unique real estate markets and sets of rewards and risks, it makes sense to diversify geographically by investing in more than one place. With that being said, consider investing in different neighborhoods and cities, and even out of state. Owning rental properties in multiple locations increases the odds of a bigger reward while balancing out or reducing risk. Other ways to diversify your portfolio are by using different investment strategies, seeking out different types of tenants, and by owning different types of properties.  


Now, you may be wondering what you can do with your portfolio after you’ve created it. The truth is, a real estate or rental portfolio is much more than an overview of your investments. It can be used as a way to “sell yourself”, much like a resume– You can present your portfolio to potential lenders, sellers, or investment partners. It is the perfect way to summarize your accomplishments and show that you know a good deal when you see one. 


These are just a few tips on getting started creating a rental or real estate portfolio. As you can see, a portfolio can help you reach your investment goals and make better decisions moving forward on your real estate journey. We hope you found this article helpful. If you are a rental property owner looking for assistance in managing your property, feel free to reach out to us! RPM Distinguished Care specializes in residential property management and offers a range of services including communication, marketing, and advertising, thorough tenant screening and selection, full-service leasing, timely rent collection, regular evaluations, cost-effective and reliable maintenance, strict and compliant evictions, and comprehensive accounting. We utilize an online portal for owners to keep track of their property, including access to reports and financial statements. With over 30 years of experience, we know how to keep your property at its best. We believe in full-service and comprehensive property management. That’s why we take the time to understand each of our clients and help identify their most closely-held goals. Let us give you peace of mind that your property is in good hands. Use our website to request your free assessment and meet with our expert team! Thank you for taking the time to read this article and we hope to hear from you soon! See you next time!


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We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.

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