If you have ventured into real estate investing, that is one of the best decisions you have ever made so far. Many people, some of them your friends and family, may never make such a decision to take charge of their financial fate. However, since you have chosen this path, you now hold great power, and you have heard that “with great power comes great responsibility”. You may not feel successful now, and there is no problem with that. The habits discussed below will make you a successful investor if you apply them.
One of your greatest responsibilities as an investor in real estate is to be an effective manager of your portfolio. It does not matter whether you manage your own property or you have hired a property manager, you are a manger. Owning rental property is never a walk in the park. There are many issues that you may have to encounter, such as bad property managers, bad employees, economic depressions, natural disasters, among many others.
Learn to properly manage your property and your finances. Increasing your rental property income is another task. This does not just refer to increasing the rent. To accomplish this, you should always rent out your property at the market rate. You will lose out on a lot if you decide to offer below market rent. Renting too high may also be a problem. Vacancy is one of the main cash flow killers, and you will experience it a lot if your rent is too expensive. This does not mean that you become a penny pincher. Your tenants also have a right to enjoy the property. However, you can cut costs in many ways.
- Transfer some utility payment responsibilities to the tenant (electricity, garbage, water)
- If your property tax bill is too high, challenge it
- Try getting better insurance rates
- Apply water-saving techniques
- Use energy efficient appliances
- Look for vendors who will offer lower rates for longer contracts
- Switch to fewer (but larger) garbage pick-ups
- Also, don’t forget to compare insurance companies for your rentals
These simple strategies will help reduce your expenses.