Adding rental properties to your real estate portfolio is a smart move that can result in more cash flow and a larger long-term income through appreciation and other returns on the investment. When you decide to increase the numbers of properties you own, you can also diversify your portfolio, reducing risk and establishing additional revenue streams.
Whether you have one Boise rental property or a dozen, you should always be thinking about your next move and how to achieve your investment goals.
Finding Your Next Boise Investment Property
Acquiring a new rental property means understanding the market and the inventory that’s available. You’ll need to review your investment goals and find a property that fits your needs and requirements. Take some time to do the math before you dive into a potential deal.
When your goal is short term cash flow, make sure you’re buying a property that can earn you more than you’ll spend, even early. When long term appreciation is more important, you’ll want to focus on single-family homes that are going to be worth more than they are when you make the purchase.
Negotiating the right acquisition price will impact how much you’re able to earn on it now and in the future. Consider what you’re paying and how you’re paying. The higher the price is, the less likely you will find cash flow. When you’re reviewing your financials, remember to include property taxes, insurance, utilities and other monthly costs associated with your new acquisition.
Financing Additional Boise Rental Properties
If you’re going to finance the next property you buy, you’ll have to find out whether it’s likely you’ll qualify for a loan. There are some new investment loan programs available to buyers, and those are worth looking at, even if they require a higher down payment or less favorable terms. Interest rates are currently very low, so investors don’t need to settle for anything that’s too expensive when it comes to loan products. There are variables, however, such as taxes and insurance which need to be considered before you work out how you’ll pay for your next investment property. Understanding your monthly payment with all those fixed and variable expenses added in will help you determine what kind of income a new acquisition can potentially provide.
There’s more to consider than what you pay for the property. You may have to make some upgrades and updates in order to get it ready for the rental market. Don’t buy something that needs a lot of work; that’s only going to delay getting it on the market and occupied.
Think about Diversifying Your Boise Rental Property Portfolio
As you’re looking for new properties to purchase, consider diversifying the portfolio itself. This can be an excellent way to add value to your real estate holdings and eliminate some of the risks that can occur when you’re only investing in one market or in one type of property.
For example, if you own single-family homes only, consider buying multi-family properties or mobile homes. You can acquire new properties by conducting a 1031 exchange as well, which not only has the potential to increase your portfolio but also defers taxes on the assets you sell.
There are many ways to add rental properties to a growing Boise investment portfolio. We would be happy to help you find a path that works best for you and your investment goals. Contact us at Wave Property Management.
Wave Property Management is a full-service leasing and management company serving Boise as well as nearby communities such as Meridian, Garden City, Nampa, Mountain Home, and Caldwell. We work with new rental property owners as well as established investors with growing real estate portfolios.