Invest wisely! Avoid these risks of growing your portfolio.
Real estate investing is a world of its own. If you are interested in real estate investing, you will need to have enough capital and income to fund a mortgage and efficient means to rent it out. If you are already doing so, you might see yourself buying more rentals. Owning multiple rentals at once is not a bad thing, but can you invest in too many rental properties at once? Here are the risks of renting multiple rental properties at once.
The Risk of a Limited Investment Portfolio
It is wise to invest in multiple things rather than one thing or even one type of thing. For example, you can diversify your investment portfolio with real estate, stocks, ETFs, foreign currencies, and cryptocurrencies. If you invest in only one type of real estate in one location, your wealth could take a huge hit if the market or the location has an economic downturn.
The Risk of Taking on Too Much at Once
Acquiring rentals is not a one-and-done process. You cannot expect to buy and rent out a property and expect no additional work. Properties need to be maintained, rent needs collecting, and renters need communicating with. Even with a property manager, there is still work to be done. A gradual approach to growing your responsibilities is a better strategy than buying too quickly.
The Risk of Devaluing a Neighborhood
Neighborhoods where most people own their homes are considered more stable and valuable. If most of the area is rented out, it is not considered the best place to live; at best, it is a stepping stone for new grads, singles, couples, and young families. If you turn multiple properties in the same area into rentals, you could devalue the neighborhood.
The Risk of Running Out of Funds
If you purchase more rental properties too quickly, you could end up running out of emergency savings or even failing to have enough income to cover all your costs. Thankfully, the right lender should help you be able to show what additional mortgage you can qualify for.
Can You Invest in Too Many Rental Properties at Once?
Yes, you can invest in too many rental properties at once. If you are ready to start or grow your real estate investments in Maryland, though, Clagett Enterprises can guide you.
Trust the Professionals at Clagett Enterprises for Your Realty Needs
If you’re looking for an experienced property management company, the perfect realtor for your property, or a professional to assist you during your purchase of any home, you can rely on Clagett Enterprises. Clagett Enterprises is a full-service real estate company with almost 30 years of experience in the Frederick and Western Maryland area. For assistance with commercial sales, leasing, management, and development and consulting, contact us online or give us a call at 301-665-6009. To meet our team and see some of our beautiful homes, follow us on Facebook and Linkedin.