I’m Rich and I welcome you on my personal space on the Internet. I created this blog with a single purpose – to inspire you to take charge of your money and help you become a financially successful and independent person.
There is a huge amount of advice online for people who are looking to make a start in real estate investments. The internet is full of advice on first steps, choosing properties, and securing financing for such a venture— but when you’ve secured your first property, the advice begins to dry up. It’s as if there is the assumption that the experience of purchasing a single property as an investment is enough; a goal in and of itself… but that just isn’t the case.
Investments are all about taking the money you have and seeking to generate further funds with it. If you have managed to invest in a single property, then there’s little point in pulling up the drawbridge and taking your investment choices elsewhere. While a diversified portfolio is always beneficial, real estate is one of the best investments there is, so why should you stop at one? If you have the funds and the experience, then finding the next step for your real estate investments is nothing short of an excellent idea.
However, as discussion, the advice on these next steps is relatively limited— or it was, until now…
Repeat the Process
The simplest next step is to do exactly as you did the first time you invested in real estate: find a property, obtain a mortgage that suits your financial situation, and repeat the process. While this isn’t the most nuanced of strategies, it is nevertheless a strategy that suits thousands of investors, and you may find it’s just as beneficial for you. It’s worth remembering that property investment doesn’t have to be exciting or changeable: there’s no harm in doing the same thing well, over and over again, if that’s what you’re most comfortable with.
For most people, their first venture into real estate investment will be with a single property. This makes sense; after all, if you’re going to be a landlord for the first time, then you’re not going to want to have to learn the ropes with multiple tenants all at once.
However, with the experience of life as a landlord already under your belt, multiple-occupancy dwellings might be your best choice. If you have the funds, then buying a property that you intend to let to multiple tenants can be a great way of increasing your return on investment, but without the bureaucracy involved in buying numerous separate properties.
You can either buy a property that is already designed to be let as multiple units, or you can convert a property for yourself. The latter is a particularly positive move. Large houses are often difficult to find consistent tenants for, but if you split that house into two or three different units, then attracting tenants should be far easier— and you’ll likely be able to charge more in rent than you would if you let the property as a single dwelling.
Do Something Entirely Different
Let’s say that your first property investment was in a small, city-center apartment that you have been letting to hard-working young professionals. You could just repeat the same process as mentioned in the first part of this piece, or you could do something entirely different.
What would “entirely different” mean? Well, if you currently own a small property that has been let to young professionals, you could venture into commercial letting. Or if you want to stay in the residential market, you could look for family homes that are designed for larger groups, or even small condos that are suitable for retirees.
This may seem like a risk, as you are making a second investment that is vastly different from your first. However, you will still have all of the experience you gained the first time around to help you out, and you’ll be able to enjoy the benefits of a varied portfolio of investments. After all, if you continually lean on the same area of the market, then you could find yourself in trouble if that specific area falters in the future. By expanding into other areas and doing something completely different, but nevertheless related, to your first investment, you can use your experience positively and protect yourself for the future.
As we’ve already mentioned, a diversified portfolio of investments is thought to be a good strategy. For most people, “diversified portfolio” means having a range of different investments, such as stocks, bonds, property, and so on and so forth.
However, why not diversify your portfolio into another country? You still have all the benefits of diversity in your investments, and it’s unlikely that the housing market in two or more countries will crash at the exact same time. You’ll also be able to take advantage of the lower purchase prices overseas.
If you are tempted, then it’s well worth researching the opportunities available. There are excellent developments available all over the world, from specialist agents in New Zealand to the likes of PropertyGuru for those looking to buy in Singapore. With specialist assistance and a willingness to embrace something new, investing in overseas property could be the perfect expansion choice for you.
While there is an element of risk to expanding into an overseas market, there’s plenty of benefits that help to mitigate this risk. Ultimately, any form of investing is never going to be a sure thing, and there’s no reason why you should restrict your adventures in real estate to your home country only.
Any of the options above make for a great choice in the next steps for your real estate business. These steps allow you to leverage the experience you have from your first investment, and turn them into an investment strategy that can help to further your finances in the future. Whichever one you choose, capitalising on your property nous and making the most of your portfolio are always going to be wise decisions that can help secure your financial future.