The Fort Worth real estate market remains hot, and it’s currently offering local and out-of-state investors a number of opportunities.
If you’re feeling stalled or looking for a good way to inspire growth in your own portfolio, it might be a good time to diversify.
Investors may choose to acquire different types of properties at varying levels of risk. You might start thinking about new markets, such as ours here in Fort Worth if you’ve never invested in this area before. Even as a new investor, it’s possible to scale growth and increase returns.
Let’s talk about why diversifying is so important and how you can do it with rental homes like those we manage in Fort Worth, Keller, Saginaw, Weatherford, and Hurst.
Diverse Fort Worth Real Estate Portfolios Lead to Less Risk
Single-family homes are almost always the investments that owners gravitate towards, and in Fort Worth, this absolutely makes sense. Well-maintained properties in great neighborhoods are in high demand, especially now with such low inventory. Tenants are usually willing to pay more for a home with plenty of square footage, outdoor space, and a garage. Single-family homes will do very well in this market, and you can count on their value appreciating quickly over time.
If you’re primarily a single-family investor, you can diversify your portfolio by acquiring small multi-family buildings, or even a unit within a well-managed and highly desirable building.
This will help you earn more with your rental investments. These property types will provide more income for you and less risk. Instead of collecting one rental payment every month, you’ll collect two or three or four. There’s more protection against vacancy because if one unit is vacant, you still have income from the other units.
Lower risk and higher cash flow are excellent reasons to diversify the type of investments you buy. Introduce a new type of property into your portfolio and see what kind of impact it has on your monthly cash flow and your projected ROI for the long term.
Invest in New Markets (Such As Fort Worth)
New investors typically stay within their own geographical area, where they’re comfortable and they know the neighborhoods. If you’re ready to start diversifying your markets, think about new communities that are attractive to investors.
In Fort Worth, owners are finding high rents and stable tenant pools. Think about checking out this market if you’re from outside of the area.
It’s easier than ever to invest from outside the city, state, or even country. When you’re working with a local property manager in Fort Worth, you will have an expert on the ground managing every step of the process, from acquisition to marketing and leasing to management and maintenance.
Diversify With a 1031 Exchange for Growth
Another good reason to diversify your portfolio is to make yourself stronger financially.
Deferring taxes can help, and this can be done with a 1031 exchange.
The 1031 exchange serves an effective and growth oriented long-term investment strategy. When you sell an income-producing property, you need to pay taxes on the money that you earn from the sale. But, if you buy a new investment property – or several properties – that are similar to the one you’re selling, you can defer the payment of those taxes.
This is especially beneficial to investors who would face a large tax bill by selling a property. It also allows you to let go of a rental property that’s no longer serving your investment goals, allowing you to gain an investment (or investments) that can provide better returns.
Let’s take a look at your unique situation, your investment goals, and the possibilities that wait for you. When you’re ready to diversify, contact us at Trend Property & Management. We’re here to help with all your Fort Worth property management needs.