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Strategies for Building a Rental Property Empire in 2021

Are you ready to build a real estate empire and generate long-term income? We bet you are! That's why we're going through some great real estate investment strategies to get you started. This small guide is discussing the hows of real estate investing, so make sure to keep scrolling for more information.


How Do You Build a Rental Property Empire?

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A lot of people who invest in real estate are stuck at the first property. They might be successful and maintain a positive cash flow, but they simply don't invest in more than one property. But you don't want that. You want to build a real estate empire! So how should you do it? We've put together these five steps to getting started.

The first thing you should do is get yourself educated, and you're doing that right now! This type of research is exactly what you need to start. So step 1 is basically soaking up all the pieces of information you can get to solve the real estate investment puzzle.

There are lots of real estate books, blogs, webinars, and podcasts available online, so there's basically no excuse not to improve your knowledge and your skill set. Of course, you don't have to know everything about investing in real estate and the current real estate market, but you need to know a lot. Luckily, you also have the option to seek knowledgeable people who can help you along the way.

Expert in real estate investments can offer you advice and consultation to guide you through the entire investment process. You'll be able to understand the essence of real estate investing and avoid mistakes so you can build a real estate empire.

Step 2 is setting clear goals. What do you aim to achieve by investing in real estate? Is it passive income and extra cash or you want to make, or are you interested in turning real estate investing into your career and using it to secure your retirement? Simply put, you can't achieve your goals if you don't define them. The more specific you get, the better.

For example, if you know you want to invest in short-term rentals, you should be looking at the most profitable vacation rentals instead of apartment buildings. You get the idea: having clear goals in mind will put you on the right path to success. You have to create an investment strategy that goes hand-in-hand with your goals. Choosing the right strategy can be challenging, so we'll discuss this later in the article.

Step 3 is finding ways to finance your investment. Before you decide on your main finance source, try to explore different options and find the one suitable for you personally. Get a clear idea about your budget (how much you can afford in the first place) and your means to get financing (whether those are personal savings, home equity loans, real estate partnerships, conventional mortgages, or getting money with the help of a mortgage broker).

After you've done these three steps, you're ready for step 4: getting your first investment property. Building a real estate empire means starting small and slowly increasing your real estate investment portfolio. Your first investment property is the foundation of your empire, so you should choose it carefully. Working with an expert such as a real estate agent, a broker, or a consultant can not only get you the best investment properties available but also inform and guide you through the investment process. It's best if you could build a team of professionals that you can trust and rely on because that would make building an empire so much easier.

Once you have a positive cash flow, you can move on to step 5, which is buying more investment properties and diversifying your real estate portfolio. So, let's quickly cover what it would take to build a real estate portfolio.

How Do I Build a Rental Property Portfolio?

Real estate investment

A lot of real estate investors can't grow their real estate investment portfolios because they don't have enough knowledge or skills. Luckily, you've got that covered in the very first step of your investment journey.

So, to start a portfolio from scratch, you should have a financial plan and an investment strategy. If you don't have a strategy, you won't know what kind of property to look for. When you establish a clear plan, you can acquire your first real estate investment property more easily. Make sure to carefully choose because the success of your empire depends on the success of your first investment.

For example, if you have a rental strategy, you should focus on finding the most profitable property for renting. Your first property should be:

  • Single-family house or apartment
  • Located in wanted areas
  • Low maintenance property
  • Low-cost property (from the purchase price to maintenance fees, home insurance, etc.)

Once the cash starts flowing, buy more investment properties. That's crucial for building a real estate empire. Maintain a constant cash flow and keep investing (in rental properties, for example).

A lot of real estate investors buy different types of properties because that's less risky and more profitable. Diversifying your portfolio helps you avoid risks by not "putting all eggs in one basket." If one type of investment fails due to market changes, other investment properties in your portfolio will continue generating profit, so you won't lose much money.

How Can I Make My Rental Property More Profitable?

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When you're building a real estate empire, you need to make your properties profitable to increase your return on investment. So, what does a property need to be profitable?

  • Great location. Even if you make lots of improvements and renovate the house, you can't generate a high income from the property in a bad location. It's better to pay a little extra to acquire a property in a more optimal location so you can generate a larger rental income.
  • Decent furniture and appliances. But don't over-invest in expensive appliances and amenities because this won't increase the rent by a significant amount.
  • Good tenants. Take enough time to interview tenants so you can find reliable people to live in your property. Having reliable tenants will make your property profitable simply because you'll have a steady income.
  • Self-maintenance. As a real estate investor, you have the option to hire a property manager to deal with daily tasks and maintenance, but this can increase your monthly costs. If you maintain the property by yourself, you'll be able to increase your rental income by a lot.

How Do You Choose an Investment Strategy?

Property at Night

There are lots of investment strategies people use to build a real estate empire, such as the buy-and-hold method, flipping houses, or rental strategies. You should choose your strategy based on your goals and resources. For example, buy-and-hold is a long-term strategy that requires lots of patience on the investor's side, so if you want something more dynamic with faster results, you should consider other strategies.

One of the most efficient strategies might be the BRRRR strategy. Basically, you buy the investment property below market value and rehab it. This means optimizing the property so you can rent it and generate income. With the rental income, you should be able to cover the costs of mortgage and maintenance and also earn profits and build up equity. Then, you refinance the rental property and buy a second property. Repeat the process and build up your real estate portfolio with multiple rental properties.

Is It Possible to Start Real Estate Investing With Little or No Cash?

It's possible to invest in real estate with little money, but you still need a really good financing plan. You have lots of options to find financing, from seeking partnerships to seller financing, borrowing money for the down payment, and much more. Many people even start by acquiring a license to work as a real estate agent and help someone else invest. Then, they build up enough money for down payments and start investing on their own.

You know your finances best, and you know what kind of real estate investments you can handle. But everyone needs a little push to start. If you want a serious real estate investor as a guide through the entire investment process, don't hesitate to contact us. We have a team of experts ready to help you build a real estate empire and scale up your portfolio with ease!

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