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How to Diversify Your San Antonio Real Estate Investment Portfolio

How to Diversify Your San Antonio Real Estate Investment Portfolio

When you want to diversify a San Antonio real estate investment portfolio, you need to be willing to step out of your comfort zone. If you only invest in single-family homes, it might be time to try a few units in a multi-family building. If you are only renting out short-term vacation properties, perhaps it’s time to think about long-term residential leases. 

There are several ways to diversify a portfolio, and if everything is going well for you, there’s a huge temptation to leave it just the way it is. But, diversifying can help you grow. It can also protect you from unnecessary risk. 

Here are some of the best ways to make some changes in your existing portfolio.

Consider Investing in Single-Family and Multi-Family San Antonio Rental Properties 

Single-family homes are always going to make great investments, especially in San Antonio. Property values for single-family homes are climbing in our market, and there’s a high demand and low supply. Tenants want the privacy and space that comes with renting their own house. They like the yard space for children and pets. You can also expect to earn top rents, especially if the home is well-maintained and in a desirable location.  

To diversify your portfolio, consider looking at multi-family properties as well. These investments will provide more income and eliminate the risk of vacancy. When you purchase a four-unit building, for example, you’re getting rental income from four different places every month instead of just one. This type of diversification can quickly help you grow your ROI and increase your cash flow. And, if one unit is vacant, you still have income from the other units. 

Maybe It’s Time to Think about Commercial Properties

An entire portfolio of residential properties in San Antonio can do very well, but if you add some commercial properties to your investment strategy, you’ll really maximize your potential for diversity. 

Commercial real estate often comes with lease terms that are longer and more favorable to property owners. Investors can usually enjoy lower vacancy rates, higher rents, and less maintenance than with residential units. Commercial properties can be anything from retail space to office buildings to industrial or warehouse spaces. A number of investors will also look at apartment buildings as commercial investments. You’ll need to be willing to learn a different set of legal obligations and best practices, but commercial properties can really help you boost your portfolio’s performance. 

Consider Diversifying with a 1031 Exchange

Save Money on Tax

If you have not already considered a 1031 exchange, now is the time to research your options. This is a great way to infuse some change into your portfolio because it costs you very little. In fact, it can save you money on taxes. 

With a 1031 exchange, you’ll sell an investment property you have, and instead of taking those proceeds, you’ll reinvest the earnings into another investment property. This is a fantastic way to upgrade the assets in your current portfolio and look for something different. There are a number of strict timelines and rules associated with this transaction, however, so make sure you’re getting professional advice. 

If you’re interested in diversifying your San Antonio real estate portfolio, we’d love to talk with you. Please contact us at OmniKey Realty. We work with rental property owners in Dallas, Houston, and surrounding areas in Dallas County, Collin County, and Houston County.