As most real estate professionals know, the market is cyclical. There will always be ups and downs, but inevitably the real estate market recovers and shines a new light on an area or submarket that developers had never even considered before.
With the New Year upon us, real estate companies are starting to get a head start on the year by doing some research into diversifying their portfolios. The faster companies start adapting to the changes in the market, the sooner their business plans can readjust and stabilize.
A diverse portfolio has become crucial to success in real estate, especially in Miami where the market is as varied as ever. More companies are beginning to capitalize on the diversified market to grow their businesses and expand their reach.
If you are a firm with expertise in the areas of developments, marketing, acquisitions or residential and commercial real estate, for example, then you will be in a better position to capitalize on the diversified market. Investors and buyers are looking for companies who are willing to get their hands dirty, and diversifying your portfolio can help highlight your firm’s additional expertise.
If you want to start diversifying, think small first. If you’re open to expanding, but aren’t sure of the sector or market you would like to enter, start by expanding geographically. Expanding your reach– whether it’s to the next town in Coral Gables, in New York or into China– helps the efforts.
Geographic expansion comes more naturally with success, as the risk is normally pretty low. But, if you are actively pursuing growth, tapping into key areas and researching can yield faster, more profitable results.
Move into a different market
If your business has already expanded, think about moving into a totally different market. Focus on a trend, do some additional research and see if the market is right for you or your business.
For example, Miami’s rental market is on the rise, therefore development companies should start researching to see where they have capacity and expertise to enter these trending sectors. Neighborhoods such as Fort Lauderdale, Boca Raton and Upper East Side of Miami are very hot right now; so consider these areas as good bets ripe for the plucking.
The more up to date you are with current real estate trends, the easier it can be to integrate in your business strategy moving forward. By taking the core of what you do (and do well) and spreading that around geographically or across other industries, it can help bring in additional profit and credibility within the real estate community.
Whether rental, commercial, international or residential, diversifying your portfolio can help you and your business stand out in a sea of real estate professionals.
Tim Lobanov is the managing director of the Verzasca Group. He has experience in the international real estate space, specifically identifying emerging market trends across both commercial and residential real estate.