Now that you have been successful with your first real estate rental property, you will want to expand your business to own even more properties. There are some things you need to think about first.
Perhaps most obviously, it is not a good idea to start expanding your empire if you haven’t figured out how to be successful with your first attempt. If you’re profiting from your first property, then go for it! If you’re not in profit and you are floundering, then it’s time to reevaluate instead of trying to expand right now.
Even if you do consider your first attempt to be a success, it’s a good idea to review your mistakes. The chances are high that you might do things differently if you had a chance to do them over again. The more you do this the less mistakes you will make with future properties!
Note that the process you will go through to purchase additional properties will be extremely similar to what you went through to purchase your first property. You need to examine the area, understand the demographics and psychographics of the area, and so on.
That doesn’t mean you need to choose the exact same type of property you went for the first time. You can diversify and be very successful as you begin to learn more about this business.
It can also be a good idea to use the money you are making from the first investment to invest in the second. This is one of the best ways to quickly grow your business. You may be very happy and satisfied with the amount of money you’re making, but you can increase your income far more when you have more properties.
Some people have concerns that they will not qualify for another mortgage to purchase a second property. As always, as long as you have a compelling investment lined up, you should be able to get a good mortgage. Lenders will certainly be interested to know how successful you were with your first property. They will know that you are serious about this as your business and that you know what you are doing. It can be a lot easier to get a mortgage that way!
As we’ve already mentioned, you may want to diversify. In past lessons, we talked about getting multi-unit properties. If there is a single home property available, you might look into that this time (just remember the reasons why we like multi-unit best). Or, perhaps you want to look into purchasing a duplex. If you like owning a multi-unit property, you may want to purchase a much larger apartment building than you went with the first time.
When you’re expanding your real estate business, the choices are absolutely open to you. You can consider your first attempt to be part of your education. Now it’s time to grow to epic proportions, making more money than you probably ever thought possible!
Once again, do not be timid to expand. It is one of the best things you can do, and as long as you follow with the right steps, you should find that it is as successful as your first — or even more successful!