How a Texas Investor Boosted Profits Despite Falling Rents

Potts, who manages 14 units across eight properties, utilizes a build-to-rent strategy to maintain control over his assets. His approach hinges on "common sizing," a method of converting expenses into percentages of total revenue to identify inefficiencies. By tracking these metrics, he reduced his overall operating costs from 30% of revenue to 26%.

His primary focus fell on three major areas: debt, taxes, and insurance. By refinancing several properties when rates dipped—moving some notes from 7.5% down to 5.3%—he increased his monthly principal payments. Simultaneously, he began actively protesting property tax assessments, successfully lowering his tax burden from 16.6% of revenue in 2022 to 11.7% today. Finally, Potts shifted his insurance strategy by raising deductibles from 1% to 5% and switching to a broker who shops policies across multiple carriers. This shift, combined with his proactive management, ensures his portfolio remains profitable even as the local rental market cools.