How to Grow Your Portfolio ~ The Business Blog
Are you wondering how to grow your portfolio? Knowing where to start isn’t always easy, but our Revenue Team is here to help. It’s as simple as identifying your goals and diversifying your portfolio. Once you’ve established these two components, your portfolio is sure to begin expanding. Revenue Management is just one aspect of our vacation rental management services that we would love to help you with. Contact us today to learn more!
The first step in identifying ways to grow your vacation home as an investment is to determine your short-term and long-term needs or goals. For example, if you are going to be using the property 4-5 times per year, you’ll need to understand the consequences that will have in terms of revenue. Likewise, if your goal is to maximize revenue by not using the property at all for personal use, then you’ll want to make sure you’ve purchased a property that has high occupancy year-round.
A good rule of thumb for return on your investment would be to produce 10% of your purchase price in yearly gross rental income. Of course, this is a general rule of thumb; if you purchase a home that requires significant upgrading, then you’ll likely need to spend more than 10% of purchase price in the first few years to get the property in great condition for future rentals.
For those looking to diversify their portfolio, we suggest doing just that. At times we see homeowners purchase multiple properties in the same condo complex or neighborhood. While that may seem like a way to streamline and simplify your costs and workload, it also bottlenecks your revenue potential. By purchasing properties of different sizes and in different areas, you are opening yourself up to take advantage of market fluctuation more so than you would if you had properties in one area. Each beach area and property type have their own advantages and disadvantages, so it would make sense to spread your investment across a few areas as opposed to be subject to one specifically.
If you have any specific questions or otherwise, please feel free to contact our Revenue Team and we’ll be happy to answer all questions. We look forward to working with you!