3 Real Estate Investing Resolutions for the New Year

As the new year approaches, many people reconsider their investing strategies. Whether you're just starting real estate investing or expanding an existing real estate business, you may wonder what to do or change in 2023. Here are some real estate investing resolutions to consider:

Make Your Business More Scalable

A promising sign of scalability is how much work you have to do yourself. If you're spending significant time researching investments, managing your properties, contacting colleagues, etc., your business isn't scalable because you can only do so much. This is true whether real estate investing is your full-time job or a secondary source of income - at some point, you won't be able to do any more work.

The end of the year and the beginning of a new one is an excellent time to reevaluate whether you could use help in some areas. Would your business be more scalable if you had assistance with property management? What if you hired a property manager or real estate investment firm to handle tasks like finding and vetting tenants, preparing rental contracts, responding to maintenance requests, addressing tenant complaints, collecting rent, and even going through the legal process of evicting a tenant who hasn't paid rent? Chances are if you're doing any of these jobs yourself, your scalability is limited. However, if you assigned these duties to a property management company, your scalability would increase, enabling you to take on more properties or spend more time researching opportunities.

This can also be an area to improve efficiency. A real estate brokerage can save you time by learning the kinds of investments you want, seeking them out, and regularly presenting you with options to consider. This will reduce the time you need to spend researching and vetting properties while providing you with quality opportunities to expand your business.

Explore New Networking Options

Once you've improved scalability, you may not rely on networking as much for finding new properties to invest in. Now you can switch your focus to networking to build your brand. Think about speaking to local real estate investing groups, appearing on podcasts, or offering an online class on a topic related to your business. For example,  you might talk about investing in single-family homes, renovating duplexes, or your process for choosing a new property.

By spending your time on brand-building, you'll meet various people who may want to work with you. For example, they could be potential investors (if you are taking on investors), renters, service providers, or real estate buyers or sellers.

Crunch the Numbers on Your Returns

The new year also brings opportunities to consider where you made and lost money last year. Of course, any business has some losses, but a yearly accounting will help you see where to make adjustments. Some questions to consider:

• Which properties are making the most money? What do they have in common? You might realize that you do better with commercial properties than residential, or vice versa, for instance.
• Are your lowest-performing properties worth keeping? Sometimes investors forget that they don't have to keep all their properties. If one has been underperforming for several years despite efforts to improve returns, you might consider if now would be a good time to sell it and invest in something else.
• Have you reevaluated rent and other fees you charge tenants in the past year? If not, now is a good time to do so.
• Are there recurring costs that can be addressed better in your rental contracts? For example, if you find that damages often exceed your pet deposit, you might consider increasing the deposit or adding fees for certain situations, such as damage over a certain amount. Your legal team or property management company can ensure the new contract is drafted correctly.
• Can you reduce costs in other ways? When was the last time you checked prices for some of the services you outsource? Some investors find they can drastically improve returns by negotiating a better deal with insurance carriers that provide coverage for their properties. If you've added properties in the last year or two, now might be a good time to ask for a bulk discount. If the insurance provider doesn't budge on price, you or your property management firm may consider switching to a lower-priced competitor.

Use Technology Effectively

There is no shortage of apps or software to assist real estate investors, from dashboards to tax and accounting programs. We meet many real estate investors who have been using the same software or apps for years. Sometimes, a program may work well when you're starting to invest, but as you add new properties, it might be unable to keep up. You could find that another option would be better for your current business, especially if you want to scale further. Another benefit of using a property management firm is that they usually keep up with the latest tech and streamline the process by providing you with an investor dashboard and easy-to-follow financials.

Conclusion

The new year is a great time to begin or revamp your investment strategy, and real estate remains a strong sector. These resolutions should help you take your real estate investing business to the next level in 2023. If you have questions about property management or investment services, please get in touch with NREMG for a consultation.