The real estate investing business can be many things but being static or boring is definitely not one of them. All real estate investment strategies – and there are many of them – give you the option to keep growing and making more and more money. One of the best ways to grow bigger as a real estate investor is through buy and rent investment properties.
You can easily start out with a single rental property and then add another one to your real estate investment property. In a few years you can add a third one, then a fourth one, and so on and so forth until you become the proud owner of multiple investment properties. After all, that’s how most real estate moguls have started out. Few of the large real estate investors had enough cash to buy a hundred investment properties right away. If you want to know how to grow your rental properties business and when you are ready to own multiple investment properties, then just keep reading.
Related: How to Manage Multiple Investment Properties on Your Own
1. You are ready for multiple investment properties when you have enough money
The most important thing you need in order to buy a single rental property or multiple investment properties is money. Whether you go for cash or mortgage, you need to have enough financial resources to buy real estate properties. In real estate investing it is highly recommended to start out with a single rental property and then add a new property to your investment portfolio every 2-3 years. Once you have paid off the mortgage on your first investment property, you can start saving your positive cash flow for a down payment on another rental property. After you have saved enough for this down payment and buy your next income property, then you can use the rental income from both properties to pay out the mortgage on the second one fast. And this becomes a positive cycle – the more investment properties you own, the easier it will be to pay for the next one.
2. You are ready for multiple investment properties when you have enough experience
Have you heard that real estate investing is learning by doing? Well, it is. No one was born a ready real estate investor. Even if you have all the real estate knowledge in the world and access to the best real estate investing tools and resources, you still need experience to become a good real estate investor. In the world of real estate investments, experience is as important as cash for initial capital. That’s why it is best to start with a single rental property, learn from buying and managing it, and then grow slowly from there on. This basically means that you are ready to become the owner of multiple income properties when you have gained enough experience from your previous rentals. After all, owning and managing several real estate properties – and thus having only multiple tenants – is much more complicated and requiring than dealing with a single property and a single tenant. So, make sure to grow your real estate investment portfolio only when you are ready to do so.
3. You are ready for multiple investment properties when you become a full-time real estate investor
One of the great things about real estate investing is that you can go about it as a part-time job or a full-time job. Both options have their pros and cons, and which one is the best for you depends entirely on your skills and goals. Generally speaking, when you decide to switch from being a part-time real estate investor to a full-time one is the right time to start owning and managing multiple investment properties. Having several rentals is a lot of hard work, so it is better done on full-time basis. Otherwise, you will risk performing poorly in your 9-to-5 job and in your real estate investing business. You could even start losing money from your real estate investments instead of making money from them.
Related: When Can You Quit Your 9-5 Job to Become a Full Time Real Estate Investor?
4. You are ready for multiple investment properties when you work with professional property management
Actually it might be possible to deal with multiple investment properties and still keep your full-time job. How, you ask? By hiring a professional property management company. The most time-consuming part of owning a few rental properties is maintaining them, finding tenants, and retaining good tenants to avoid high vacancy rates. This all can be done by professional residential property management people, who will be much more efficient and successful than you, the real estate investor. After all, they are professionals and that’s what they do for a living. So, don’t ignore this option when you think how to go about working with multiple investment properties.
5. You are ready for multiple investment properties when you want to form a real estate investing partnership
Another sign that you are ready to become a multiple properties investor is when you are willing to work with other real estate partners. Networking is a crucial part of the real estate investing business, and since before you buy your first rental property, you should be looking for potential future partners. Once you know enough reliable real estate professionals whom you would like to work with and who would like to work with you, you should form a real estate investing partnership and start buying and managing together more and more investment properties. When you invest with other people, you will have access to more finances, more real estate knowledge and expertise, and a platform to share all risks. These all are requirements for buying and owning multiple investment properties.
Related: Real Estate Partnerships Are Not All Roses: Beware of These 7 Potential Traps
If you want to grow as a real estate investor, the best way to do that is by buying, owning, and managing multiple investment properties. You will have endless benefits such as several sources of rental income and a high positive cash flow. The more rental properties you have, the more money you will make as an investor. So, you should look for any opportunity to add a new rental property to your real estate investment portfolio. When searching for the best income properties across the US, check out Mashvisor for thousands of available properties and for the most important data on them provided by Mashvisor’s investment property calculator.