{"id":15641,"date":"2021-08-20T15:09:26","date_gmt":"2021-08-20T22:09:26","guid":{"rendered":"https:\/\/www.rentecdirect.com\/blog\/?p=15641"},"modified":"2022-02-14T13:40:35","modified_gmt":"2022-02-14T21:40:35","slug":"investing-in-multiple-rentals","status":"publish","type":"post","link":"https:\/\/www.rentecdirect.com\/blog\/investing-in-multiple-rentals\/","title":{"rendered":"Pros and Cons of Investing in Multiple Rental Properties"},"content":{"rendered":"

\"investing<\/a><\/p>\n

As a real estate investor, you\u2019ve hopefully had some solid success managing your<\/span> first investment property<\/span><\/a>, and you might be wondering if it\u2019s time to purchase a second property to expand your portfolio. And why not? Investing your profits in new properties is a great way to grow your business and move closer to your financial goals.\u00a0<\/span><\/p>\n

Adding a second investment property (or several more) brings with it new challenges and new questions to consider.\u00a0<\/span><\/p>\n

Pros and Cons of Investing in Multiple Rental Properties<\/span><\/h2>\n

On the positive side, a portfolio of multiple rental properties equates to more income, provided a thorough <\/span>rental property analysis<\/span><\/a>, conducted before you consider purchasing anything, has yielded positive results.\u00a0<\/span><\/p>\n

In addition, once you\u2019ve established a positive cash flow on your first investment property, there are often more opportunities available to you to finance a second investment property, such as a second mortgage or a <\/span>1031 exchange<\/span><\/a>.\u00a0<\/span><\/p>\n

One more added appeal to owning multiple investment properties is diversifying risk by diversifying your portfolio. You might consider investing in a mix of different property types such as <\/span>multi-family homes<\/span><\/a>, condos, or apartment buildings, for example, or in different sizes in terms of square footage, bedrooms or bathrooms. You\u2019ll be better positioned to ride out a market downturn with a diversified portfolio or properties.\u00a0<\/span><\/p>\n

Managing multiple investment properties is not without its drawbacks either, and you\u2019ll want to consider whether you\u2019re ready to take on the additional challenges.\u00a0<\/span><\/p>\n

For one, owning more properties requires a larger outlay of capital. Do you have enough savings and income to handle multiple mortgages, property taxes, and possibly a property management fee? Will you be able to cover emergencies and repairs?\u00a0<\/span><\/p>\n

Learn more: <\/span>All You Need To Know About Property Management Fees<\/span><\/a><\/p><\/blockquote>\n

Another drawback for some is the increased amount of work managing multiple properties entails. Even if you employ help from a <\/span>property management service<\/span><\/a> to take care of the day-to-day, you’re still responsible for the overall financial health of your investments and ultimately, as a landlord, the happiness of your tenants.\u00a0<\/span><\/p>\n

Real estate is often about timing, and judging whether it\u2019s a good time to add a second property to your portfolio can feel tricky: You want to build on your success but don\u2019t want to make a bad decision that could jeopardize your hard work.\u00a0<\/span><\/p>\n

Here are a few questions to consider while weighing your options:\u00a0<\/strong><\/p>\n