The real estate market in Hampton and the whole seacoast of New Hampshire is thriving. It is a phenomenal place to live and property values continue to reflect that. The available inventory on the market sits at about half of what it was just one year ago. Sales are happening rapidly and properties are going under contract in record time. Even with all of the volatility of a seller’s market, investing in real estate is still one of the least risky and most effective ways to build wealth. Here in Hampton, NH, there is also a thriving Airbnb and VRBO market as investors are buying up coastal properties knowing there are now additional ways to rent them out on a week to week basis. PMI Property Management is firmly entrenched in various aspects of the Hampton, NH, real estate market. PMI understands the ins and outs of what makes this unique community on the seacoast so desirable. The following proven methods to help your portfolio grow become even more important in a hot market.
1 – Get in the game
It is not possible to grow your real estate portfolio until you have one to grow. The acquisition of your first property can set you up for tremendous success – or become a major obstacle in building your portfolio. That said, it is extremely important you don’t make a rushed decision on a potential property just to say you have started the process. It is wise to begin with smaller or less expensive property because it allows you to learn about investing with a much lower risk. Regardless of how well the purchase and subsequent resale of the initial property go, your very first transaction will always be one of your most valuable experiences in your real estate investment career.
2 – The concept of leverage
When you buy a property for one price and subsequently make the necessary improvements to the property to enhance its value, the difference between the improved market value of the home and the price you originally paid is called equity. There are a few different ways for you to access that equity. You can borrow against the equity by acquiring a home equity line of credit. You can also list the property for sale, and when it sells, you can take the equity out as profit. Whichever method suits your goals and individual circumstances best, the next move is to leverage that equity into another property or even multiple properties should your increased equity allow. Especially as you begin your investment career be mindful that you don’t over leverage yourself by making sure that your cash flow covers the monthly payments on your debt.
3 – Work smarter instead of harder
It isn’t always simple to find undervalued properties where you can make improvements and earn a profit. However there are still many goldmines to be found throughout Hampton, NH, and the surrounding seacoast as many of these properties have been owned for a long time and and may not have been upgraded for decades. There are various web-based tools, apps and software systems that can alert you when a potentially undervalued property is listed for sale. It is also a very good idea to form connections with individuals who have inside information on the Hampton, NH, market. A good place to start is to consult with a group that specializes in Hampton property management.
4 – Find properties before they are listed on the local Multiple Listing Service (MLS)
By networking into the seacoast real estate world through the property management avenue you put yourself in position to know information before it is available to other investors or prospective homebuyers. Property managers are very often notified early in the process if a property is going to be listed for sale long before it becomes official. Their clients are usually property owners and one of the key roles of a property manager is to make sure the property is always ready to be sold for the most value. They do this through optimizing tenant revenues and keeping the property maintained and in great shape. When a client discloses that they are thinking about selling a property, the property manager is often the first who gets the chance to tap into their network of investors, professional connections and potential owners. Being entrenched in the Hampton, NH property management scene can give you a strategic advantage over other individuals who have to wait for a property to be listed on the MLS.
By using these four methods, you can begin to build a strong portfolio with a very solid foundation. Be sure to watch for a future PMI Green Rock blog post where we will cover four additional proven methods to help make sure your real estate portfolio continues on its positive trajectory of growth.