If you’re ready to turn your hobby of investing in real estate into a full-time venture you’ll have to get into serious business mode. What does “serious business mode” mean? Well, it means that you need to pay attention to details so you can get the best real estate deals to ensure your success. When choosing to go the career route it’s imperative that you know the difference between the deal of the century, a so-so deal, and a money pit.
It doesn’t mean that you need to know everything there is to know about real estate it just means that you need to know a few important details about real estate investing. The other things can be covered by surrounding yourself, and utilizing, a trustworthy team of professionals. The key to building a thriving business is to know what you need to focus on and get help where you need it.
Profiting On The Purchase
To maximize profitability it’s important to; track the details and crunch the numbers, have a return on investment that you need to see, and a plan in place for that particular piece of property. The real estate purchase starts by doing some market research and then finding a property you are interested in purchasing. The first thing you’ll want to look at is the value or price in the neighborhood compared to others, comparable sales, and check with the city planning department to make sure there’s nothing planned that could affect the value of the property. If everything checks out and the numbers look good it’s time to make an offer. Track your initial offer and subsequent offers, the purchase price, cost to make any needed improvements, cost per square foot, expected rents, property taxes, and other fees as applicable.
Profiting Post Purchase
For any real estate transaction it pays to keep close tabs on all of your expenses and try to find ways to do it cheaper and faster to maximize profit to either re-sale or rent the property. Keeping things simple by always using the same color of paint, the same tile, the same light fixtures, the same toilet, etc. is very beneficial. It takes away the tedious process of decision-making, makes it easier on contractors to pick up supplies, and saves you money down the road because you don’t have 20 different cans of paint drying up, or extra tile or grout that can’t be used, it can always be used on the next job or when making repairs. In addition it saves space and if you’re limited on that you know that it can be expensive to acquire additional space to store materials.
Profiting With Higher Rents
1. Know your market
Drive around, check out the competition, find out how much they are renting for, find out what those properties have to offer. You want to get the maximum amount of rent with as little as possible vacancies so it pays to do your homework.
2. Provide superior service
If a prospective tenant calls and the person, you or the property manager, are rude then they are not likely to rent from you even if it is cheaper than other properties they are considering. If they don’t get a call back at all or if it is delayed than the same applies. Tenants want to know that the person in charge is willing and able to quickly handle issues in a polite manner if and when they arise.
3. Out shine the competition
Offering move in incentives such as a discount on the first months rent or paying for cable or other benefits can go a long way with prospective tenants. Of course having the place smelling and looking clean and attractive will also help in attracting tenants.
Often times investors think competition starts with price and while it is a big driving factor many prospective tenants also want value. Give your tenants what they want and see your profits grow.
Profiting With a Good Reputation
Building a good and consistent reputation for yourself and surrounding yourself with a team of professionals who also have a good name will draw people to you. If you can build your brand and get name recognition that is a great way for prospective tenants to feel confident and comfortable with the product you are offering.
Good luck with your real estate business and may it be a profitable venture!