1. Interviewing Your Tenants MATTERS
It is important to have a protocol set in place when choosing the right tenant for your property. Go the extra mile when interviewing your tenants because choosing the wrong tenant can fall back on you. You want to make sure they are taking care of your property. Don’t cut corners because again, choosing the wrong tenant can lead to even bigger issues. Invest that extra money for providing background checks on potential tenants to ensure they will be a good fit for your property.
2. Treat Your Real-Estate Business like a Real Business
You should be running numbers before you buy or flip a property to ensure that you have enough funds for it. Building a real-estate team can provide great structure to your business. A certified public accountant, real estate attorney, construction team, highly qualified real estate agents and other professionals, should be at your side at all times to ensure that you are successful in your real-estate business. Working with a CPA is particularly helpful when determining potential tax implications of certain real estate transactions.
3. Create a Financial Plan That Involves Your Investment Goals
Take into consideration how much financial capacity you have. This includes assessing the financial resources you have available for your investing activities, such as savings, credit cards, financing, and retirement plans. You will also need to figure out how much you want to profit from the property in a flip or the amount of cash flow you desire from holding the property and renting it out.
4. Develop a Good Customer Service Strategy
Make sure you are picking the best property management firm to help you manage your business. Provide a system for how your tenants will contact you when problems arise. Implement building checks to monitor for potential repairs that may be needed. Make sure any problem doesn’t turn into a bigger one. Laslty, ensure that you are always keeping good communication with your tenant.
5. Don’t Be Afraid to Walk Away from a Bad Deal
Don’t be afraid to follow your gut feeling. Sometimes things don’t always feel right in your assessment of a real estate opportunity or in the acceptance of a tenant. Ensure you are doing your homework by taking the extra time to research your area and/or tenant and work with relevant professionals to help you make the most informed decisions for your real estate business.
6. Make Sure You Choose the Right Business Structure for your Real-Estate Goals
Whether you are flipping real estate or buying and holding for the long-term, it is important that you understand what type of entity structure makes the most sense for your real estate activities. Our small business optimization service can help you make the best decision with a full confidence and insight on how you’ll need to operate your business as well. CLICK HERE to learn more!
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I want to invest in a business to make my retirement worry-free and less stressful, so I was thinking of going for real estate. I appreciate your advice when you told us to create a financial plan involving our investment goals and financial resources to help us figure out how much profit we’ll be earning. I’ll keep this in mind while I look for a financial planner to help me out with my investments from now on.