Whether you are a relatively new real estate agent, an experienced broker, an investor, or an entrepreneur, you may be seeking the next step in your career and a way to elevate your real estate resume. If this aspiration rings true for you, you should consider building a real estate portfolio to highlight your assets and solidify your particular approach to real estate investing.
Real estate is widely considered one of the safest long-term investments. If you have been investing in real estate for a long time, or if you are, like many, looking for a relatively risk-free way to diversify your current holdings, learning how to build a real estate portfolio is a great place to start. Size and experience do not matter; what matters most is that you keep track of your deals and holdings, both past and present, and use this documentation to monitor, amend, solidify, and present your investment strategy.
Learn more about real estate investing with our book list.
What Is a Real Estate Portfolio?
Think of a real estate portfolio as a resume that highlights your experience, strength, approach, deals, and assets, current and historical, within the world of real estate investing. To be clear, this file is not simply a list of your current holdings. Though a strong real estate portfolio will include that, it should also include thorough documentation of all of your past holdings and deals, whether they are rentals, land, rehabs, flipped units and homes, real estate investment trusts (REITs), or real estate funds.
Real Estate Portfolio Template
Should I Invest in Real Estate?
The short answer, if you have access to substantial capital and a solid credit score, is yes. Real estate investment provides many benefits, including passive income, tax breaks and deductions, and property appreciation. Furthermore, real estate investments statistically tend to increase in value over time despite (and sometimes because of) inflation. It is important to note that, for the most part, the vast majority of real estate ventures should be looked at as long-term investment opportunities, not quick money-makers.
That being said, due to the potential of market volatility, economic downturns, and financial difficulties that can arise in property management, real estate investment is not without serious risk. Therefore, diversification is essential, and investing in real estate should not be your only path, but a part of your larger strategy.
How to Build a Real Estate Portfolio
The key to a strong real estate portfolio is to clearly identify where you currently are on your investment journey and where you’d like to go. No matter the level of your current investments, or whether you are new or experienced in this field, there are a few simple steps that can help you solidify your strategy:
- Understand your current situation: Record your current assets and past deals, then look over this record for gaps and potential opportunities for diversification.
- Goal-setting: Define your goals and what types of real estate (rentals, commercial, land, etc.) will best help you reach those goals.
- Prepare your finances: No matter the size of the investment you plan to make, take the necessary steps to prepare your finances. This process includes acquiring access to liquid assets that can be used on down payments and potential unexpected expenses.
- Research, research, research: Focus on the locations, markets, property types, REITs, real estate funds, and financing options that fit your overall strategy.
- Pay attention and be flexible: Invest, monitor, and make adjustments as needed.
As your real estate portfolio grows, it is imperative that you continuously assess your progress toward your goals and that you are prepared to pivot, if necessary. The real estate market can be a fickle one and, therefore, you need to be ready to adjust your portfolio if and when it becomes necessary. This capriciousness is also why patience matters so much; remember that this type of investment functions as a long-term strategy and should be treated as such.
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How to Start a Real Estate Investment Fund
Start small, diversify, and grow. That is the essence of starting a real estate investment fund. Real estate investment funds are often mutual funds that go towards a public real estate company’s securities. Though these funds often include REITs, they focus on long-term appreciation, unlike REITs that focus on short-term income and dividend payouts.
If you are looking for quick gains and willing to take the risk, REITs may make sense for you. However, if you are looking for actively or passively managed investments over a substantial timeframe, real estate investment funds are a much better and safer bet.
Become a Rental Real Estate Agent at AptAmigo
Beyond the realm of real estate portfolios, REITs, and real estate investment funds, real estate is a wonderful, albeit challenging, career path. Getting started on your own can be remarkably difficult and many agencies, unfortunately, operate on a sink-or-swim model. Even if you make it, you’ll face the constant uphill battle of researching, generating, and managing leads and accounts. At AptAmigo, we support you through the entire process. From education to tech support, mentorship to marketing assistance, to establishing a social media presence, we can help you break into the real estate world. Whether you are new or experienced, don’t hesitate to reach out and discover all that it means to be a member of our team.
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Melanie Robinson is a writer and poet from Texas. You can learn more about her and her copywriting business on her website.
