There seems to be so few people who really understand the business of real estate investing or take it seriously. The market has been so inundated with get-rich-quick schemes which has left us with few mentors that can or will guide us as craftsmen did working with stone cutters and masons when apprenticing.
Sorting through a lot of hype to find sound business practices and principals in most of the programs that are offered these days is a daunting task. I’m so grateful that I didn’t fall prey to one of these programs when I started my portfolio 20+ years ago. Don’t get me wrong, there is a lot of money to be made as a real estate investor. History shows that the wealthy use this form of investing because it works.
I’m not talking about the folks who own large real estate portfolios. I am referring to the small to average investor who wants to invest in a few well selected properties that will give them a nice retirement adding-up to $500,000-$2,000,000 worth of inventory that are solid and cash-flow well. These beginners struggle to locate and understand the business of investment real estate although they know investing this way is the best way to create future wealth.
I was fortunate to build a small business from scratch into a $1.8 million dollar operation that I ran for 16 years. During this time, I was always learning and refining my approach so we could perform at our fullest potential.
After I gained a measure of mastery with the methods, processes and approaches to run a successful well functioning business I took what I had learned and applied those practices and tools to real estate investing. The results were that both businesses ran well, grew over time, and were sustainable. It was important to me to bring my consciousness into my professional life, which meant I was always keenly aware of the impact of our products and services on people lives. In the business of real estate investment, our products are the properties and our service is maintaining these homes for our residents.
So what are the practices that create sustainable wealth for a real estate investor? It’s really all about having consistent systems in place. I know that doesn’t sound
glamorous and frankly it isn’t. That is why the “gurus” don’t talk about these subjects. It is a mundane topic that isn’t very marketable.
Just like in our personal lives, it is the consistent practices that make a long-term difference. It seems dull to think about brushing your teeth everyday but it makes a real difference over time. Owning a piece of property is similar to this. The slow consistency and everyday habits are what create results.
So here is one of the starting foundational systems that you will need to have in place in order to maintain your property. Don’t wait until you have a problem to look for a reliable contractor. You will be coming from a place of panic which isn’t a good start to any relationship.
Here are the three systems that you will want to have in place:
- Ongoing: Ongoing maintenance are the responsibilities that need to be done each week: cleaning the common areas, mowing the lawn, removing rubbish, and touching up paint in worn spots.
- Seasonal: Seasonal maintenance is done during the appropriate time of year: snow plowing, window cleaning, leaf raking, furnace cleaning, gutter cleaning and outdoor painting.
- Occasional: Occasional repairs are the unplanned repair jobs like fixing running toilets, light switches, broken A/Cs or furnaces, and roof leaks.
You should have a reliable service contractor for all three of these areas. Make sure to start looking for these resources before you need them. Get a few different quotes then negotiate with these contractors. It will take a bit of work at first but it will be well worth it.
Make sure the contractors that you choose are trustworthy. I would suggest working with a couple of contractors at first until you find the one that can do most repairs, gets the job done quickly and affordably, and is reliable.
Once you have all three areas of maintenance setup, maintaining your property is quite easy and systematic.
So here it is! Real Estate investing is a real business and a great one at that. Owning, maintaining, and serving others as a real estate investor is a noble profession.
One of my upcoming blog posts will be about another key area that will help ensure your success as a real estate investor: how to avoid vacancies.