Scaling Your Rental Housing Business
If you’re looking at growing your real estate portfolio for retirement or cash flow goals you have to think about how best to grow your portfolio in a sustainable way. If you grow too fast you can outstrip your resources and your team. If you grow too slowly you can miss out on market opportunity and great deals in the expanding Seattle-metro rental housing market. So where's the balance in expanding your real estate investment portfolio? That you have to decide for yourself based on what you think you and your team can do. There are some things to consider in between work, family, and investments.
Profitably and soundly scaling your portfolio is hard work. This can include rehabbing a new property as well as actually scanning the MLS for deals and looking at potential options on top of managing your existing rentals and maintaining some free time. To enjoy life outside of your real estate portfolio you have to find the balance between rental housing and the rest of your life, and be careful to not accidentally create another full-time job for yourself. This is less of a concern for those that are full-time real estate investors or those looking to go full time.
However, for most RHAWA members, this is not their full-time gig. They usually have a job and that means that a growing portfolio can quickly eat up free time! Find the balance that works for you, but have a goal. If you’re looking to leave your full-time job, you'll need a certain amount of cashflow. If you are looking at hitting certain retirement or early retirement goals then there is a certain amount of properties and cashflow that you have to achieve for that as well.
In finding that balance there are 3 areas you have to think about in how to scale your real estate portfolio.
How are you acquiring properties? Are you looking for deals yourself? Are you looking with a realtor? What time are you devoting to looking for properties and creating deals and opportunities?
How are you managing them after you acquire them? Most of our members do their own management. Do you have a list of pre-selected vendors in place? Do you have someone you can help you if you're out of town or unavailable? Having a solid team of people around is crucial to success in any business. This principle is especially true in rental housing.
How much cash do you have? What can you leverage? How do you want to grow your portfolio? Are you working with a business partner or are you using creative financing to expand your portfolio? If you want to reach your goals you have to start to understand what resources you have, what resources you might be able to use, and how to turn those into income producing properties.
If you want to learn more about expanding your portfolio and the business side of rental housing, RHAWA offers classes in our Managing the Business series that are quite helpful including Keeping Track of the Money, Intro to Rental Property Investing, and Buying Properties.