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Recent data shows that home sales have increased by nearly 10%, a noticeable improvement from the previous year. By the end of the calendar year, the global real estate market is expected to surge past $630 trillion. Investors should be thinking about the right strategies for maximizing returns.
Finding the right portfolio management strategy is the first step. Nail down an income model that generates the cash flow you need to keep scaling.
If you want quick and consistent income, your best bet is the investment property model. You can diversify this strategy with various property types:
- Residential homes
- Townhomes
- Condos
- Duplexes
- Apartments
- HOA communities
If you identify a market with high homeownership activity, you can diversify your income strategy with the buy-and-sell method, too. Let's take a closer look.
Financial Planning In Portfolio Management
First, you need enough capital to get your asset allocation going. Talk to a financial planner about a loan model that can help you achieve your goals. There are several ways to get loans, even if your credit score isn't where you want it to be.
Capital solutions include:
- Traditional bank loans
- Private lenders
- Real estate investor groups
- Family loans
- Self-financing
- Liquid Capital
- Real estate-specific loans
Borrowers with strong credit histories may be eligible for the lowest interest rates with generous payback windows. Don't let this point stop you from applying for loans with other qualifying scores. There are also loans specifically designed for investors that assess a previous purchase to help finance the next one.
Assess Your Risk Management
Risk management should be at the forefront of your investment strategies. Yes, smart risks lead to substantial rewards, but you don't want to close a deal in the wrong market. Understand when real estate segments are hot and cold to ensure you're receiving the highest ROI possible.
Think long-term.
For example, if you're planning to sell an investment property in the future, you need a rental management strategy that ensures tenants are residing in the property for at least three years. Constant tenant turnover is not a selling point since investors want to retain that passive income; annual property marketing and tenant screening cut into profits.
Work With a Property Management Company
One of the smartest ways to manage risk is to work with a property management company. This decision is critical for investors who are serious about the rental property model.
Property managers handle the following tasks:
- Maintainance and coordination with service vendors
- Tenant placement and screening
- Rental property inspections
- Real estate marketing
- Financial reporting and rent collection
Property management companies also have realtors on their teams who can help you select investment properties (or buy and sell properties) with the highest profit potential.
Make an Informed Choice
Your next step is to consider the information above in your decision-making process. Don't undertake this project alone. Work with trusted real estate professionals who can help you build a profitable strategy with sound portfolio management.
PMI Equitas is a property management leader in North King and Snohomish counties. Our leadership team is certified in REALTOR, CPM, MPM, TRLP, and RMP, and served on the board of the NARPM. We optimize profitability through a suite of services undergirded by the latest technology and customer service philosophies.
Book your consultation to learn more about the potential of portfolio management.
