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How to Grow Your Real Estate Portfolio in 2023

If you’re a seasoned real estate investor, you know how quickly the market changes and how much prices fluctuate. As such, growing your real estate portfolio takes time and effort while working with the current market. If you’re looking to grow your real estate portfolio in 2023, read along as we discuss some tips and considerations for investing this year. 


Contents of This Article: 

What to Consider Before Investing in Real Estate

Investing in real estate is a huge decision, even for seasoned investors. After all, a lot of time, money, and due diligence goes into purchasing investment properties. That said, to determine whether an investment is right for you or not, you have to consider several factors. 


For instance, consider your goals for your real estate investment. Are you looking to turn it into a rental property? Or do you want to fix it and flip it for profit? Investing in real estate isn’t one size fits all–there are several strategies and ways to succeed. 

Additionally, you have to look at the status of the housing market and the overall economy. After all, housing accounts for a large portion of all economic activity, so it’s crucial to keep up with any significant changes. 

Finally, it can be hard to expand your portfolio if you’re constantly bogged down with managing several investment properties. Luckily, rental property management in Baltimore can help relieve you of management tasks so you can focus on growing your portfolio. Next, we’ll go over some helpful strategies for real estate investing if you’re looking to grow your portfolio this year. 

How to Grow Your Real Estate Portfolio in 2023

Whether you own several rental properties already or want to start investing this year, many investors aim to grow their portfolios this year. However, expanding your portfolio with new investments takes time and planning. As such, here are five steps to consider if you’re looking to grow your real estate portfolio in 2023.

  1. Develop a Clear Strategy and Plan
  2. Consistently Research the Market
  3. Establish a Budget and Financing Plan
  4. Diversify as Much as Possible
  5. Analyze and Track Your Portfolio Performance

Develop a Clear Strategy and Plan

Investing in real estate is easier if you have a plan or strategy in mind. First, investors should establish their goals for the year and determine what types of properties they’re interested in. Then, you can come up with a more compelling investment strategy. 

For instance, if your goal is to generate sustainable long-term income, you’ll want to search for rental properties with high occupancy rates and consistent cash flow. However, if you’re looking for a quick return, you may consider buying a fixer-upper, renovating it, and flipping it for profit. 

Consistently Research the Market


Once you have a strategy in mind, you’ll want to monitor the market like a hawk. Seasoned investors know how quickly the market changes, which could affect many aspects of your investment plan. 

Staying up-to-date with the real estate market gives you a better idea of how your investment will play out. After all, you can research to find out which property types are most popular, which areas have the least vacancies, and the differences in prices depending on location. Ultimately, more industry knowledge can help you make informed decisions about your investment. 

Establish a Budget and Financing Plan

Any investor needs to establish a budget and a plan for how they’ll finance their investment. A good starting point is determining how much you can afford to invest. Then, research the different financing options that are available to you. For instance, if you’re buying an investment property, you could look at the pros and cons of traditional financing, hard money loans, or other creative financing options. 

Once you find a financing plan that works for you, you’ll be able to attain a repeatable investment strategy. In turn, finding a repeatable technique that works for you and your goals can help you invest more seamlessly and efficiently than your competition.

Diversify as Much as Possible

While sticking with one investment location or property type can be simpler, drastic market changes can come back to haunt you. After all, the status of the real estate market differs depending on location, property type, and other economic factors. 

For example, if you put all your time and effort into short-term rentals in one specific location, they could go through periods of success or major decline. If all your rentals are declining simultaneously, you’re left with a huge problem. On the other hand, if you have a mixture of short-term rentals and long-term rentals in different cities, one could make up for the other during economically challenging times. 

Analyze and Track Your Portfolio Performance


Analyzing and tracking the performance of your investment portfolio is essential for successful investors. You should consistently monitor how your investments perform and what you can tweak to improve them. 

More specifically, it’s important to look at your returns, occupancy rates, and overall value for each investment property. Regularly looking at your overall portfolio can help you better understand your properties’ performance and look for areas that need improvement. 

Mitigating Investment Risks in Financially Unstable Times

The past few years have been a rollercoaster for all investors. Whether you’re investing in rental properties or stocks, drastic market changes can affect your strategy and plan. As such, it’s important to come up with ways to research the market and mitigate risks during unpredictable times. That said, here are a few tips. 

  • Understand Market Conditions
  • Avoid Adjustable Rate Mortgages
  • Make a Larger Down Payment

Understand Market Conditions

Understanding the real estate market has been challenging, especially over the past few years, since it’s constantly changing. However, it’s crucial to develop a basic understanding as you grow your real estate portfolio in 2023. For instance, if you want to minimize risk and improve returns during a recession, you must know how to adapt. 

Additionally, you’ll want to find out what market conditions are best for you and your investment goals. For example, as we continue experiencing high inflation, you may think that now is not a good time to invest. However, real estate investments can serve as a hedge against inflation. So, holding onto an investment property can provide consistent returns instead of selling during uncertain times.

Avoid Adjustable Rate Mortgages


While adjustable-rate mortgages (ARMs) may seem desirable initially, they can present some significant risks. For instance, they fluctuate with interest rates, so when rates rise, so does your mortgage. 

Unfortunately, if you go this route, you could end up with an extremely high mortgage payment, which you may not be able to pay. So instead, consider locking in a mortgage interest rate, then refinancing at a lower rate in the future. 

Make a Larger Down Payment

The suggested down payment for an investment property is usually around 20% to 35%. That said, it may seem scary to make a larger down payment than necessary, especially with today’s real estate prices and mortgage rates. 

However, a larger down payment can help you get a better interest rate, lower mortgage insurance premiums, and a lower debt-to-income ratio (DTI). In turn, you pay less over time and gain more borrowing power for future investments. 

3 Creative Ways to Finance Your Investment

Traditional mortgage loans are great for many investors and real estate investments. However, that’s not the only way to finance a real estate purchase. Depending on the property type and your investment strategy, finding an alternative financing method can be extremely beneficial. That said, here are three creative ways to finance an investment property. 

  1. Hard Money Loan- Hard money loans come from private businesses or individuals to help finance an investment quickly and efficiently. Requirements for a hard money loan are much more attainable, and funds come in faster than most financing options. However, interest rates are generally higher, and repayment terms are typically shorter.
  2. Cash-Out Refinance- A cash-out refinance transaction allows you to use some of your home equity to pay off your mortgage. Then, you keep the difference, which can give you a head start on another investment.
  3. Home Equity Line of Credit- Instead of paying off your existing mortgage like you would with a cash-out refinance, a home equity line of credit allows you to borrow against the value of your home. You can borrow up to 80% of the home’s value, excluding the mortgage amount. This strategy is great if you’re doing repairs or for situations where you don’t need a large sum of cash, like for an entire property purchase.

Managing Your Investment Portfolio With Ease

If you’re looking to grow your real estate portfolio this year, it’s essential to understand the current market and use your resources to your advantage. For instance, look for creative financing methods that work best with your goals and finances. Then, you’ll want to consider how you’ll maintain your portfolio of investment properties. 

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Bay Property Management Group offers comprehensive management services to busy landlords that don’t have time to manage their rentals. Whether you need assistance with marketing, screening tenants, performing regular maintenance, or collecting payments, BMG can help. Contact us today if you want to learn more about our management services near Baltimore, Philadelphia, Northern Virginia, or Washington, DC.