Here’s how thinking like a fund manager when buying even single units can set you up with a serious real estate portfolio in the long run.
Adopt a Portfolio Mindset Early: Even if you start with one unit, approach it as the first building block of many. Institutions invest with a clear strategy – you should too. Decide your criteria (e.g., “I’ll focus on new builds in growth areas” or “I’ll buy only in established communities with 7%+ yield” or diversify across a couple segments). Create a simple business plan for yourself: how many units do you aim for, in what timeframe, with what capital. This treats your small investments as parts of a greater whole, which keeps you focused. One of my clients set out a 5-year plan to buy 1 property per year – and he actually exceeded it, with 6 properties by year 5. That was because he tracked progress and operated like a mini firm – every rent dirham was reinvested, every decision checked against his plan.
Standardize and Systematize: Funds managing hundreds of units have standard procedures; you can mimic this as you grow. For example, use a standard lease template for all your properties (saves legal headaches). Have a set process for tenant screening (credit checks, employment verification – we can help set that up). Use the same interior paint and durable materials in all units – easier bulk maintenance and replacements. One investor I know furnishes all his rentals identically (same furniture package) – not only does this get bulkdiscount, but if one unit’s sofa gets damaged, he can replace it with the same model, or even shuffle furnishings between units. He essentially operates like a serviced apartment company across individually owned flats. His tenants get a consistent quality (building his brand as an attentive landlord) and he gets efficiency. As you reach 4-5 units, consider property management software (some are inexpensive and tailored to landlords). This will put you ahead of the curve and make scaling to 10+ units much easier because you’re treating it professionally from the start.
Leverage Portfolio Financing: As mentioned, banks in UAE may offer portfolio loans or at least allow multiple mortgages. Once you have a few properties, talk to your relationship manager about consolidating or getting a larger credit line. Institutions do this to get better interest rates and terms (e.g., a blanket mortgage over 5 apartments at once might get a slight rate reduction vs 5 separate ones, and easier admin). Also, banks see you as a serious investor when you have several assets, and you might move from retail banking to priority banking which can open new doors (some banks have special real estate investor packages). I’ve seen clients successfully negotiate interest rate cuts of 0.25-0.5% on new mortgages once they reached 5+ properties, because they could point to their track record and volume – a perk usually only “big guys” get, but you can too once you cross a threshold. That improves your portfolio NOI (net operating income) significantly when scaled.
Diversify Smartly Within Your Niche: Institutional portfolios balance risk and return by diversifying. With one-bedrooms, you can do the same: perhaps hold some in high-yield areas (like International City, yields ~8% nikoliers-global.com) and some in high-growth areas (like Dubai Creek Harbour, lower yield now but huge upside).
Or some geared to short-term rental, some to long-term – so you have income stability from long-term leases and high income bursts from holiday lets. As an individual, you have the flexibility to diversify gradually with each new purchase. By property #10, you could have a mix such that your overall portfolio has a lovely combo of, say, 7% net yield and blue-sky appreciation potential. Funds do this balancing act at large scale; you can emulate it property by property. It hedges you – if one segment slows, another might excel. We saw this during Covid: city tourism rentals dipped, but affordable suburban rentals boomed as people moved to cheaper places – a diversified portfolio covered both, so overall income held up. Thinking like a fund manager means consciously adding different “flavors” to your portfolio to weather cycles.
Professional Support Team: Institutions have teams – you can assemble your own dream team: a savvy broker (hi! 😄), a reliable maintenance contractor, a property-savvy accountant, and maybe a lawyer for the occasional legal question. Having go-to professionals saves you time and costly mistakes. By property #5 or #6, most investors realize the value of outsourcing specific tasks to experts (e.g., hiring an accountant to summarize rental income/expenses for easy tax reporting if needed back home, etc.). It’s worth the cost as your portfolio becomes a substantial business. It also signals to others (banks, partners) that you run a tight ship, which can lead to, for instance, better deals coming your way because brokers know you’re an organized buyer who can execute.One of my clients who reached 12 units jokingly calls himself a “micro-REIT”. He even produces a simple quarterly report for his own review, listing occupancy rates, any capex done, and cash-on-cash return – just like a REIT would for shareholders. It might sound overkill, but guess what – when he later sought investors to pool money with him for bigger deals, he showed them those reports and track record. They were impressed and confident in him, raising capital was a breeze. Now he manages a small fund of 30 units (including his original 12) – truly going institutional! It started with him treating a one-man operation with the professionalism of a big firm.
Conclusion: Stringing together multiple one-bedroom investments can lead to a substantial, well-oiled portfolio that looks and performs like it was assembled by an institution. By thinking big while starting small, you set the stage to eventually operate at an institutional level – potentially even attracting outside capital or selling the portfolio as a whole to a larger investor for a premium, if you ever choose (that’s another institutional play – assembling a portfolio and selling it in bulk for more than individual sales would yield, effectively capturing a “platform premium”).
If you’re an investor with aspirations to build a large portfolio, let’s map it out like a pro. Reach out to me – I’ll help you craft an investment thesis, connect you to systems and people to streamline management, and of course source the right properties that fit your long-term plan.
Together, we’ll ensure each property purchase isn’t just an isolated win, but a strategic step towards a powerful, institutional-grade portfolio. You may be investing alone, but you can invest like a giant. Let’s build your empire, one brick (or one-bedroom) at a time. 🏗🏢💪
