The real estate market can be quite unpredictable at times, and it’s often during times of uncertainty where many investors reap the most rewards. However, times of uncertainty can result in significant losses as well. So, how do you balance it all out? You create a well-rounded real estate portfolio that can absorb losses. Read on to learn how.
When you’re just starting out, you’re likely to purchase one property and see how it goes. But as you generate more income and have the means to diversify, consider the following options.
Offer Multiple Types of Homes
If you take a step back and observe any market, you will see that most businesses offer their customers multiple options when it comes to their products. For example, Apple offers a suite of products and services because they understand that customers have varying needs.
That’s why it’s in your best interests to take a similar approach when it comes to real estate investing. Every home buyer isn’t interested in a large home, nor all they all interested in a townhome. By investing in different types of housing units, it’s likely that you will always have a property that fits a potential buyer’s need, preventing you from missing a home sale.
Make Yourself Known
These days, branding is a central to moving your home. How will you sell a home if home buyers aren’t aware of it? Fortunately, marketing is becoming easier with the advent of social media channels. You can market your homes directly to would-be homeowners with little out-of-pocket expense.
To optimize your marketing skills, you should consider taking a marketing class. A basic marketing class will help you establish the foundations for a marketing plan for your homes.
Consider Renting and Flipping
Another way to strengthen your portfolio from the ups and downs of the markets is to rent and flip. Renting will help you when the market is slow by allowing you to retain ownership while still making a monthly profit. When your market reflects a buyer’s market, flipping will help you capitalize on quick gains, allowing you to reinvest your profits into your portfolio. By offering both options and more, you can avoid lulls regardless of the real estate market.
You can offset risk in real estate by differentiating your portfolio. A well-rounded portfolio will help you weather any storm the real estate market presents.