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How to Diversify Your San Diego Real Estate Investment Portfolio

How to Diversify Your San Diego Real Estate Investment Portfolio - article banner
February 25, 2022Propety Management

It’s good advice for any portfolio of assets: diversify. 

When we’re talking about your San Diego real estate investments, diversification can mean property type, risk level, even neighborhoods. You can change the way you finance your investments and you can utilize a 1031 exchange if you’re looking to grow your portfolio or unload a rental property that just isn’t working for you any longer. 

RentSimpli is a full-service San Diego property management company specializing in single family homes, townhouses, condos, mobile homes, small commercial buildings and small apartments. We recommend our clients diversify to reduce risk and manage portfolio growth. 

Here’s how we recommend you do it.

Invest in a Blend of Single Family Homes and Multi-Family Units

Single family homes are always popular investment options for San Diego. There are many different neighborhoods in and around the city and even if you only invest in these types of properties, you can put together homes from several diverse areas. Choose a mix of new construction properties in HOA communities and/or older, more established homes in residential neighborhoods. 

To reduce your risk and add some energy and growth to your portfolio, consider looking at multi-family properties as well. There are many ways that this can help you earn more with your rental investments. They can provide more income for you and less risk. Instead of collecting one rental payment every month, you’ll collect two or three or four. This protects you against vacancy risks. If one unit is vacant, you still have income from the other units. 

Lower risk and higher cash flow are excellent reasons to invest in multi-family homes as well as single-family homes. The additional good news is this – multi-family properties such as condos and apartments are plentiful in San Diego, so it won’t be hard to find and purchase a great investment property.  

Add Commercial Properties to Your San Diego Rental Portfolio 

An entire portfolio of residential properties can do very well, but if you add some commercial properties to your investment strategy, you’ll really maximize your potential with diversification. 

Commercial real estate has a lot of potential, especially in the strong local economy that San Diego has. 

Often, commercial investors enjoy 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. 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. 

Diversify your Real Estate Investment Financing 

Investment FinancingAnother great way to diversify your real estate portfolio is by experimenting with your financing options. Some investors pay in cash and others take a traditional mortgage. You might be able to get a better deal if you try owner financing. You usually won’t need a large down payment, and if you structure the deal so that you’re primarily or completely paying the principal, you’ll find your cash flow and your ROI can improve quickly. 

You can also breathe some new life into your investment portfolio with things like a 1031 exchange when you want to buy something new and you’re ready to let go of an asset you’re holding. 

We can help you create a more diverse real estate portfolio, and we invite you to contact us to discuss your unique investment goals and best options. RentSimpli is a full-service property management company serving landlords, investors and property owners in San Diego & Riverside Counties, including La Mesa, El Cajon, Chula Vista, Santee, Rancho Bernardo, Escondido, Fallbrook, Temecula, and Murrieta. We look forward to helping you.



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