As you work to establish your rental property business with your first property pick, consider your long-term goals. Growing your portfolio is generally a good investment decision if you have the right real estate investment strategies in place in advance.
Whether you’ve been involved in the Baltimore rental market for some time or you are just starting out, following a few critical tips for success from your Maryland property management team here at Renters Warehouse can make a big difference!
How do you grow your investment portfolio in a meaningful way to yield the best profit? Here are some strategies to help you do well in the Baltimore-area rental market!
Work With the Right Wholesalers
Real estate wholesalers and fix-and-flip investors may be two of the best friends to have in this industry. A lot of business in real estate is still done by word of mouth.
If a real estate wholesaler finds a property that they know will be a good rental property—but they don’t want the hassle of owning and renting it themselves—they need to find a property investor that’s ready to move on deals like this. If you have these relationships established beforehand, you’re more likely to obtain access to the best deals and leads when it comes to purchasing single-family homes, condos, rowhomes, and townhomes.
Wholesalers have one goal: To find another property owner willing to buy quickly so that they can recoup their investment (if any) and then move on to their next purchase. However, wholesalers tend to have deep roots in the communities they operate within.
They also tend to have outstanding access to properties that haven't hit (or are unable to be logged into) the MLS just yet. These properties are usually distressed sales or have some kind of lingering legal issue (such as an impending foreclosure) that makes them ill-suited for the mainstream sales process.
If you have the available cash flow, this is a good opportunity for you to find great rental property potential that will allow you to customize the extent of updates, maintenance, and repairs.
What About Buying New Properties?
Current market conditions indicate there’s incredible demand for existing homes for sale. That means that finding a home to buy may be hard to do. In some areas of Baltimore, new home construction is even slowed due to the pandemic. Add to that the limitations of finding an affordable new rental property in the densest parts of the Baltimore rental market, and you may be better off fighting over existing homes for sale.
Finding the balance here is important.
- Look for a property that offers what you need at a competitive price.
- Affordable housing options for rentals can sometimes be hard to find initially.
- Research to find precisely what you need before diving into buying a new or used property.
Get Costs Under Control First
Before you dive deeper into owning additional property, your Maryland property management company can help you to balance your current costs and run some profitability numbers.Your goal should be to reduce your overall costs as much as possible before you invest. This frees up your working capital and available funds and helps ensure you are already managing your existing portfolio wisely.
What are the kind of expenses you need to be aware of as an investor?
- These costs can include things that are fixed and do not change, such as property taxes.
- You also have to take into consideration costs related to the maintenance and upkeep of your property.
- Think about other expenses associated with marketing your available property, property insurance costs, and associated fees for an attorney or other representatives you need.
Then, factor in the costs you’ll need to pay out-of-pocket related to buying an additional property. That is going to cost a bit more. It may include:
- Property appraisal costs
- Property inspection costs
- Down payment requirements
- Broker fees if you use an agent
- Repair and upgrade costs.
Can you reduce these costs? Not always, but you can work to ensure they are planned for before you move on to expanding your real estate portfolio in the Baltimore area.
Utilize a Professional Property Management Team
Do you want to keep those costs even more in control and work to reduce your overall expenses? Find better real estate investments and make better decisions with the insight of Maryland property management services!
Our Rent Estate™ Advisors can guide you not only in managing your existing property but also in helping you to reduce your other costs, finding available properties, and negotiating terms for you.
When the time comes for expanding your real estate investment portfolio, make sure you’re working with our team at Renters Warehouse. Let us guide and support you through this process with some of our free resources available to property owners like you!
Get started with our free guide all about real estate investing to learn more crucial tips for sustainable growth.