5 Principals of Success in Real Estate

As much as we would like for every property investor to be successful at what they do, the truth is, some just won’t be. In fact, we have witnessed some truly spectacular failures over the years. It’s unfortunate, but not everyone is cut out for the gig. There’s something we’ve noticed along the way, though, and it’s that the people who abide by certain principles are the ones who succeed. If failure is not an option for you, then you need to be practicing these 5 principles when managing your property investments.

1. Effective Management. When you own a rental property, you are the manager of that property – even if you’re working with a property management group. True, they’ll handle most of the day-to-day tasks, but as the owner, you still need to be involved. Part of this involvement is being prepared for the unexpected, staying up to date on finances associated with the property, and just keeping a watchful eye on things in general. When you learn to manage your property (or properties) effectively, you’ll be surprised at how much smoother the entire operation is.

2. Rent at the Right Price. Determining the rental fees for your unit may seem like a simple task. You just check the local comps and price yours accordingly, right? Well, sort of. Yes, you want to review the rental rates of homes surrounding your property, but the trick is in arriving at a rate that is appealing to both you and your tenants – and then reviewing that rate regularly to make sure you’re still on target.

3. Decrease Costs. Another way to boost your income is to find ways to decrease the expenses associated with your property. Obviously, you don’t want to do anything that will lessen the appeal of the property to your tenants, but there are some cost-cutting actions you can take that won’t have much of an effect on your renters. Upgrade to energy efficient appliances (there’s a bonus tax credit with this one, too), implement water-saving strategies, and see if you can score lower insurance rates. If you can get away with it, look into transferring some or all utility bills to your tenant.

4. Set Goals and Carry Out Plans. If you jump into real estate investment without any specific goals or even a basic plan, you probably won’t get very far. Goals and plans are like your roadmap to success, and without this guide, you’ll soon get lost. Write down your goals, and go over them and your overall plan regularly to make sure you’re on track. You have to monitor your progress to determine if what you’re doing is working, and if it’s not, change up your plan and try again. The point here is to be committed, focused, and flexible when you need to be.

5. Pay it Forward. Whether you believe in karma or not, giving back to others is an important part of success that is often overlooked or ignored. However, having a generous spirit can help you on your path to success in ways that you may not have thought of. Two of the best ways to do this are educationally and financially, donating your time, expertise, or money to worthy causes. When you act with kindness, honesty, and integrity, you are doing everyone a favor, including yourself. Think about it like this: your success has been built on the successes of others, so why not give back where you can?