One of the best reasons to invest in San Diego rental real estate is the diversity of property types in this market. We’ve discussed this in a previous blog, and today we’re reminding investors that you can diversify what you own when you want to grow your real estate portfolio and find new ways to earn money on
rental property.
We call this real estate investing 2.0. You’re experienced enough to understand the basics of earning money through rental properties. Now, it’s time to leverage what you have in order to establish more wealth and scale your portfolio.
Here’s how different property types can work best for you.
Diversify with Different San Diego Rental Properties
If your entire investment portfolio is made up of small multi-family units like duplexes and three or four-unit buildings, maybe it’s time to buy a single-family home. Or, if you only have single-family homes, it might be time to think about a small apartment building. You can also buy condo units in an association neighborhood or consider investing in commercial space.
Diversifying in this way allows you to protect yourself from risk. If you’re an investor who had an entire portfolio of commercial retail and office space during the pandemic, you would have struggled during this unprecedented time when businesses shut their doors and companies closed their offices in favor of remote workspace.
Having different property types in your portfolio allows you more flexibility and fewer losses when the economy shifts and tenant trends change.
There’s also less risk.
Multi-family units, for example, offer owners protection against vacancy loss. When you’re renting out a single-family home, you lose all of your income when your tenant moves out. If you own several multi-family units, there is still an income stream from other units to rely upon when one tenant leaves.
Single-family homes are great for attracting long-term tenants and
higher rents.
Balancing your portfolio with a mix of these property types is essential when you’re putting together a profitable, long-term investment plan.
Diversify with a 1031 Exchange
If you have not already considered a 1031 exchange, now is a good time to consider this option. It’s a great way to protect and diversify your portfolio. There isn’t much cost to you, either, if you do it right. In fact, a 1031 exchange 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 re-invest 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 these transactions, however, so make sure you obtain professional advice if you want to take advantage of this type of opportunity.
Think About Additional Dwelling Units (ADUs)
We’d be happy to help you invest in different types of San Diego rental properties. Please contact us at Onyx Property Management, and we’ll talk about your investment goals. We can also help you navigate the ADU space and handle the process from inception to finished product through our sister company,
OneStop ADU.
Experienced
San Diego property management professionals, Onyx Property Management serves the entire county, including San Diego, Chula Vista, Oceanside, Carlsbad, and the surrounding areas.
