The best time to plan for success is before you jump into a new venture. Invest in rental real estate with these seven essential tools in your toolkit, and you won’t be leaving your success up to fate or luck.
Before you do anything (and we mean anything), do your research. Success begins with understanding the necessary considerations and potential benefits of establishing a rental property. Bankrate has put together this expert guide that explains the initial considerations when purchasing an additional property, financing options, and the best strategies for earning supplemental income with your investment.
Lay out a detailed, 3-5-year timeline that lists steps you’ll take to grow your revenue. It sounds intimidating, but using an online tool like LivePlan can help you take the big picture and break it down into smaller, manageable components. Business planning is the very first step in launching any business venture, and real estate investing is no different.
Find a generic download from NOLO or another property law site, then have a legal professional review and tweak your lease for your specific area and property. A lease needs to be a failsafe, guarding against every possible liability or tenant situation. It’s a great investment, and it needs to be tailored to your needs.
Trustworthy Management Software
Reliable management software isn’t really an option these days. The good news is that there are plenty of great choices on the market. Your software needs to address accounting needs, applicant screening, online payment processing, tenant tracking, and other options that depend on your needs and preferences. Check reviews to make sure your choice is well-supported and reliable. Get started by looking into AppFolio, Buildium, and ResMan.
Planning for marketing your property is a task best completed along with your business plan. Keep it flexible and plan for adjustments depending on your target audience and the success of your marketing mix. Never stop learning; it’s a field that’s ever-changing.
Dependable and engaged employees and contractors are essential to real estate investing success. Develop a hiring strategy that is brand-focused and integrates your marketing strategy, and stay up on the latest human resources management tactics to retain great employees. Starting over with a new hire is expensive, and it hurts your bottom line in the long term.
Knowing your own strengths and weaknesses means knowing when it’s time to delegate. When the minutiae of property management begins to take up too much of your time, recognize that it may be time to hire a property manager.
Your time and the success of your investment depend on having a workable plan and sticking to it. As every successful investor knows, “failure to plan is a plan to fail.”