How can Memphis rental properties help you build up your investment portfolio?
We have been helping new investors and experienced real estate professionals start and grow a lucrative rental property business by focusing on what our market can provide. There’s a lot of potential in Memphis, and we invite you to learn more about the sales market as well as the rental market. You’ll find you can buy a property for significantly less than you’d spend elsewhere. Rents are rising, and there’s a strong pool of eager tenants who are looking for well-maintained properties.
Think about how Memphis can fit into your established investment goals. If you don’t already have a clear strategy for achieving the goals you’ve set forth, you’ll have a hard time building up your investment portfolio. You won’t have any idea where to look or how to know success when you see it.
Review your goals, set some action steps, and be willing to look at Memphis rental properties.
Whether you’re a real estate investor from out of state or you have a growing investment portfolio and you’d like to include some real estate for diversity and income, talk to us.
You don’t have to be a real estate expert to know that real wealth is created when you build up your investment portfolio. It doesn’t matter if you have one property or 10; consistently adding assets will give you an opportunity to earn more.
If you already own Memphis real estate, knowing how to get more money out of those assets will also help you build your portfolio.
Here’s how you can build off whatever you already have, and what you need to know about keeping that growth sustainable.
Acquiring Memphis Real Estate
One of the most obvious ways to build your investment portfolio with Memphis real estate is to buy Memphis real estate.
The market has been in a state of change over the last year, and we’re at a point where prices may feel like they’re peaking. Interest rates are also higher and potentially set to rise again, which means buying a property is more expensive than it was a year ago. However, these market factors mean there’s not quite as much competition as there was recently. You’ll be able to make a competitive offer on a potential investment property.
If you happen to be buying in cash, you’re in an even stronger position.
Smart investors know that when you’re trying to build your portfolio, you have to be ready to buy whenever an opportunity presents itself. The Memphis real estate market is strong, and that will impact how you structure and negotiate your deal, but don’t wait for the “right” market conditions. There’s no perfect market. It’s always a good time to invest in Memphis real estate.
Acquire rental real estate for your investment portfolio when there’s something available that meets all of your investment criteria. When you find a property that meets your criteria and complements your existing portfolio, buy that asset. As you build up your portfolio, you’ll earn more and find yourself with less risk and extra leverage.
Build Your Memphis Investment Portfolio by Diversifying With Real Estate
All of the investment experts everywhere have provided this advice at some point: diversify.
Your investment portfolio cannot hold all stocks. It cannot be based strictly on crypto currency or low-risk treasury bonds. When you diversify your portfolio, you eliminate risk. Bringing down the risk that you’ll suffer major losses will make your portfolio stronger. It will attract more wealth.
Adding real estate to your investment portfolio will help you hedge against inflation. It will give you the opportunity to take advantage of strong market trends in specific industry sectors. If you already have real estate in your portfolio and you’re looking for more, don’t be afraid to step outside of your comfort zone, whether we’re talking about property type or location.
If you have traditionally invested in single-family homes only, a great way to both diversify and grow your portfolio is by looking for opportunities to invest in multi-family properties or even an entire building. Perhaps some commercial real estate will help you grow. Look for a different geographical region like Memphis, or diversify how you finance a property purchase.
Memphis Can Work for a 1031 Exchange
One of the most popular ways for investors to build up their real estate portfolios is with a 1031 exchange. This will work especially well for you if you already own an income-producing property and you want to sell that property and buy something else.
The 1031 exchange will be especially lucrative for you if you own an income-producing property in an expensive market and then you exchange that property for a property (or properties) in a market with a lower cost of entry. Like Memphis.
You also get to defer your taxes.
Under the 1031 exchange program, you can sell one property and then defer the capital gains taxes on it by investing the proceeds into another property (or several properties) that are similar. By “similar,” the IRS simply means that it has to be another income producing property.
This is a great way to unload an investment in a pricey market and then re-investing those funds in a Memphis investment. You can easily build up the size and strength of your portfolio by selling one single-family home, for example, and buying a couple of duplexes. There are a lot of options.
Already Own Memphis Real Estate? Build Your Investment Portfolio by Adding Value
Build the value of your portfolio by leveraging the equity of your existing real estate. When you can access equity in the properties you already own, you can use that money to acquire additional properties.
Increasing the value of your Memphis rental properties is another excellent way to grow your portfolio. Growth does not always come with acquisition. You can earn more rent and increase your ROI when you make some cost-effective upgrades and updates to your rental homes.
We’d love to take a look at your current investment portfolio and make some recommendations on how you can do better in Memphis. Please contact us at RiverTown Realty.