Acquiring multiple properties can be considered a profitable business venture that generates a stable stream of monthly revenue. Market Research has shown that investors who prefer to own multiple properties outnumbered those who prefer to buy a single properties. This is especially true in Marques Commercial Direct, where buying multiple properties is more popular than buying single-family home investment (SFI) properties and other properties.
While purchasing multiple properties breeds compounded financial sources among investors, this also holds true for real estate brokers. More real estate purchases mean greater sales and commissions on their end. Below are some of the implications of purchasing multiple properties.
- Recurring business opportunities are heightened resulting from real estate investors
Most home loan borrowers only sign eight mortgages, averaging only one loan in a period of five years. This is a significant difference when compared to real estate investors, whose number of purchases far outnumbers those of these home loan borrowers. This has placed a significant challenge on real estate brokers to maintain their market strategy and keep abreast of the trends in market advertising. This ensures that their clients are constantly aware of their brand and latest promotions by frequently contacting them via e-mail or phone calls. This is to guarantee that they are on the shortlist when a new investment opportunity comes in.
- Diversifying Potential Risk
Purchasing multiple properties is a good way to lower the risk of investing. There`s a slight chance of future market shocks if you have a diverse portfolio of properties in the market (such as condos, single-family home types, apartments, or even multi-family homes).
- Ensuring a higher long-term ROI
The more properties you own, the greater return on investment (ROI) you will be able to achieve. Furthermore, you can choose to sell some of your invested properties at market value and then purchase new ones.
- Utilizing tax benefits
There are potential opportunities to profit from tax advantages through an IRS Code 1031 exchange, or the so-called 1031 exchange if you have several income properties. This means that using the 1031 exchange allows investors to defer payment on income from the sale of one property and invest the proceeds in the purchase of another. Thus, selling it and reinvesting in income properties helps you create wealth over time.
Building up a property portfolio is a risk that requires astute independent investors to consider market demands and potential income. Hence, mounting your real estate investment holdings is a hit if money, time, and creativity permit.