As an experienced real estate investor, you’ve navigated the complicated waters of real estate investing and seen success in your current investments –in short, you’re proud of how far you’ve come (and you should be).
However, if there’s one important lesson you’ve learned it’s this: the entire real estate investing process can be very time-consuming.
With your jam-packed schedule that includes work obligations, family time, and financial responsibilities, you’re ready to explore a different approach to real estate investing – a more passive way to earn the same (or greater) amount of returns. Luckily, we have a plan just for you.
3 Ways to Increase Your Real Estate Investing Returns
We’ve compiled three excellent plans for expanding your existing investing approach. By following these strategies, you can further an already-successful investing career and maximize your returns.
1. Acquire More Properties
Putting together a diverse portfolio is a great way to maximize your returns— a process that’s easily achieved by acquiring new properties.
Think of it this way: As an investor, you don’t want to limit yourself to only purchasing properties in your local area, especially when it’s uncertain if they will continue to stay affordable. Instead, you may need to look elsewhere, in order to get the type of yields you desire.
For instance, if you lived in San Francisco, the median price for a property there is about $1.1M (Zillow). When you compare this to the median home prices in higher-yielding markets ($125K in Columbia, S.C., $61K in Birmingham, AL, and $52K for Cleveland, Ohio, for example) you quickly see that you’re able to buy six or seven remote properties for the same amount of money. As your rentals are located in multiple markets, this strategy also helps mitigate your risk.
When HomeUnion helps you buy new properties, you achieve diversification passively— which is exactly what Roderick Clemente, a client of ours, was craving. Our effective solution freed him from his “one tiny box” approach to investing.
Clemente originally got into real estate investing by purchasing a rental property in Hoboken, New Jersey, in the early 2000s. Worried about tying up half million into “one tiny box that was dependent on one local economy,” as he put it, he decided to use a 1031 exchange to purchase properties across multiple markets instead.
This process—under the careful guidance of HomeUnion— enabled Clemente to invest more effectively and gain the type of passive income he was craving. He’s now the proud owner of multiple investment properties across the nation.
2. Trade Your Current Property With a 1031 Exchange
Take a play out of Clemente’s playbook and utilize a 1031 exchange to trade up your current investments. A 1031 exchange serves as an alternative way to purchase an investment property. It allows you to essentially take the equity of one investment property and exchange it for a new property or set of properties.
Trading your current investment property in this manner is an excellent way to mitigate your risk. This strategy also enables you to defer taxes and potentially earn higher returns, while achieving faster growth.
Pros and Cons of Performing a 1031 Exchange
|Defers taxes on the sale of your existing properties||Strict timeframe (45 days to identify a property, 180 days to close)|
|Potentially produces more income||Additional steps to complete|
|Diversifies your portfolio|
HomeUnion eliminates the cons of a 1031 exchange by working quickly and efficiently with our partners to help you set-up a 1031 exchange and find properties within a short timeframe. We also take care of acquiring the properties on your behalf… so you don’t have to sweat about missing the deadlines!
3. Sell Your Current Property
We know for some investors this may seem like a drastic option— but maybe your current property simply isn’t netting you the types of returns you desire and/or you’re ready to dispose of it. By selling, you’re able to liquidize the home’s value, while also freeing up capital.
HomeUnion can help you dispose of any unwanted assets (assuming they are in one of our markets), by connecting you with reliable buyers; our platform brings them right to your door. This results in less stress and overall work for you.
When your property is then sold, you can re-invest your capital with HomeUnion. By purchasing properties through our services, we’ll help you build a diversified portfolio, acquire properties on your behalf, and manage those properties, so you never have to answer an emergency call from your tenants ever again. You can truly be an investor, not a landlord.
Advance Your Real Estate Investing Career Now
Learn how HomeUnion enables greater returns and hands-free investing by calling 888-276-0232 today or schedule a consultation. We clear the best path for you to continue your investing success.