How to Diversify Your Real Estate Portfolio | Bozeman Property Management Advice

You’ve probably heard the advice on diversifying your real estate portfolio a few times before. The advice is great, and often one of the reasons that people begin to invest in different types of real estate. Having a variety of real estate types can be a great way to diversify a portfolio. Investing in a mix of stocks, bonds, funds, and other financial vehicles isn’t the only option. Real estate provides you with a tangible asset.

The real estate market is forever changing, no matter if that market is local to you or not. As any Bozeman property management company will tell you, it’s more important than ever to protect yourself and your investments against any risks. Your real estate investments need to be diversified, and there are several ways to do that that will add value to your current portfolio of properties.

Diversifying with Residential and Commercial Spaces

Most of the investors who come to us ask for advice on either residential or commercial properties. Which makes sense, everyone wants to specialize in certain areas. Whatever your unique investment goals happen to be, you might want to open your portfolio up to a small mix of both types of investments.

Start to consider and identify opportunities that you may not have considered before. Talk to professional Bozeman property managers if you’re not sure where to start. We know the local real estate market and its’ trends. Let us know what you’re currently doing and what you haven’t tried yet. We’ll be able to measure your portfolio against what’s available and help you find unique ways to diversify.

Bozeman Multifamily and Single-Family Homes Are Different

Whether you remain focused on residential rental properties or you’re venturing into this new territory for the first time, there’s plenty of opportunity in the residential real estate. Single-family homes are different to acquire, lease, and manage versus multi-family properties. There’s also the potential to rent out to university students seeking off-campus housing in the local rental market. If you have not considered diversifying within your residential portfolio, now is the time to think about it.

Single-family homes and multi-family units each bring with them unique tenant pools. Think outside the box. If you’ve only invested in small multifamily apartment buildings or duplexes, think about a single-family home. Or, consider what you can earn by venturing into student housing opportunities.

Creating Opportunities Through Financing

Another great way to diversify your real estate portfolio is to experiment with different financial options. Many investors pay in cash when they can while some investors still prefer to take a traditional mortgage. You might also find you can get a better deal if you try owner financing. You usually won’t need a large down payment, and if you structure the deal so that you’re primarily or completely paying the principal, you’ll find that both your cash flow and ROI can improve quickly. Don’t forget that a 1031 exchange can help you as well. Acquiring a residential property while deferring taxes.

The recent ups and downs in the real estate market highlight the importance of diversification. By working with a professional Bozeman property management company, you’ll find that we can help you strengthen your real estate investment portfolio. If you have any questions about how to diversify your real estate portfolio or even maximize what they earn, please contact us at Peak Property Management.