When you are looking to build wealth, you need to focus your time, attention and energy on what will make you money. There will be no shortage of distractions, but you don’t want to spend all of your time putting out fires. What makes real estate investors money? Buying properties. So what should you spend your time doing? Looking at properties. I suggest looking at deals every week to determine if there are new opportunities and properties in the market. These are three areas every real estate investor needs to focus on so that they can make money.
1. Use an Agent
If you are just beginning in real estate, an agent may not be necessary. However, if you have a larger portfolio, you don’t want to waste your time looking at properties that aren’t a good fit for you as an investor. I encourage you to first find an agent that is familiar with investing and investors. Then, give them criteria for the properties you are looking for. They should bring you prescreened deals, so the only properties you are evaluating are ones that fit your specific formula and needs.
2. Build Systems
Problems will arise no matter what industry you are in, and you have to have systems to handle them. For a real estate investor, these problems could be rehabs, tenants, repairs, emergencies and more. You don’t want to deal with those issues while you have a business to run. Delegate management and repairs to free up your time and focus. Hire property managers to deal directly with tenants. Create checklists for property conditions and tenant repairs to simplify tasks that aren’t making you money. I would love to give you the exact checklists I use for you to download, so check the end of the post to find out how!
3. Crunch the Numbers
Finally, when you’re looking properties, you have to evaluate them based on the formulas you created for yourself and your business. The biggest question is whether it would make you a good cash flow or not. A good rule of thumb here is that every property should give you about 1.5% monthly return on the total cost of this property. If you are not getting enough cash flow, that property will be a waste of your time, energy and money. Furthermore, you want to spend time applying for loans and writing contracts. As a real estate investor, you make money when you buy, not when you sell. You must make sure you are getting a good deal for each property, that you can create value, and that it will add income to your life.
In any area of life, you must focus on what is important. I hope this blog has helped clarify these areas in real estate for you so that you can make sense of making money for making a difference.
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