Does the Size of Your Rental  Portfolio Matter?

by Julie Broad

Sometimes the size of what I've got makes me feel a little insecure. Ok I said it. And now that it's out in the open I want to talk about this for a minute because I have a feeling that I am not the only one feeling this way.

The thing is that whenever I get in a group of real estate investors the question everyone always seems to ask is "How big is yours?" They just expect me to drop it out there for everyone to see and evaluate. Perhaps even more unsettling is they are going to judge it based on the size alone when they should realize size doesn't actually matter.

This is a cheeky way of saying that the size of your real estate portfolio isn't that important. And too many real estate investors get WAY too hung up on it.

As someone who mingles and networks with some of the smartest real estate investors in North America, I often feel self conscious with the number of properties we own. And when I met someone recently who'd only been investing for 4 years and owned over 50 properties I took her to coffee to learn about her business.

Turns out in her second year as a real estate investor, she rounded up enough partners and enough deals to purchase over 30 properties!!

I was impressed.

But, as I dug deeper I learned that year happened to be 2007 ... the absolute peak of the housing market in the area she was buying in. I also learned that most of the properties she bought are now worth 80-85% of what she paid for them AND most of them are costing her and her partners money every month NOT generating positive cash flow.

She told me that there is one property in her portfolio with about $50,000 in equity that she is trying to sell because she needs that money to pay for keeping the other properties this year.

As I listened to her story I was suddenly very pleased with our portfolio, and with what we teach you, our valued Rev N You readers. I also realized very clearly that the size of your portfolio doesn't matter at all. It's the size of your cashflow!

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