Real estate is a tricky industry, even though many assume it’s as easy as “flipping houses”. There’s much more involved than just buying a property, doing renovations, and selling it for a higher price. As you’re likely aware, there’s a lot more paperwork, marketing, and competition in the real estate industry than you likely expected in the beginning.
With that said, managing a real estate business doesn’t have to give you early gray hairs. We’ve put together 4 tips on managing your real estate business, so you can breathe a sigh of relief and get a bit more free time into your schedule.
Position yourself as a business, think like an enterprise
If you’re an independent contractor, start thinking of yourself as a business instead of an employee. Plan for scalability, marketing, and invest in networking to develop relationships. The benefits may seem mostly psychological, but they can have an impact.
Also consider how real estate software intended for small real estate groups and enterprise businesses. Transaction management software like Paperless Pipeline will help you easily manage a lot of the paperwork, like commissions and financial reports, so you can focus more on other important aspects of running your business.
When you think of yourself as an enterprise business rather than an independent contractor, it helps you to form a broader umbrella perspective of your long-term scale. You represent your business, but your business is itself an entity, and that means developing your business’s “personality”, so to speak. Thinking big puts you in a great spot to sell your business for a huge profit when the time comes to retire. Use a service like ExitAdviser to simplify things and get the maximum price for your business.
Find hidden, off-market properties
One of the tricks up experienced real estate agents’ sleeves is knowing where to find off-market properties, or “pocket listings”. These are properties that the owner typically wants to sell quickly for personal reasons, not because of foreclosures.
The owner could be going through a divorce, or is planning to move abroad and just wants to quickly close the deal, for example. Because these properties won’t be found on the usual portal listings, it takes leads and a bit of luck to find them. Social media can also be worth checking, like Facebook Marketplace.
Houses with a “For Sale by Owner” sign are a good indication the homeowner is hoping for immediate cash, and you’re in a much better position to purchase the property at below market value.
You can’t devote all your resources to finding these kinds of properties, but they will give you the best return on your investment when you do come across them. You can also put your antennas out to your network circle, as friends and family may recommend you to someone they know.
Target the vacation rental market
Vacation rentals are a hot market, and continued to show strong growth even during the pandemic, as vacation travelers sought vacation alternatives to resorts and hotels. Even with relaxed restrictions, vacation rentals continue to perform strongly, and are part of the “new normal”.
The goal however isn’t to own a property that only performs well during peak tourist seasons. If you invest in a great location, you can adjust the rental price during the offseason to make sure it stays booked all around the year.
In a short survey taken by HomeAway, it was revealed that the average homeowner who rents their property for 18 weeks of the year earns an average $28,000 annually extra income.
For these homeowners it makes a great long-term investment in their annual mortgage, but for a year-round renter with several vacation rental properties, the numbers can quickly add up. For that reason, large capital firms have been investing in buying up entire housing development areas for vacation rentals.
Outsource the boring stuff
Many small business owners complain that they work so many extra hours, compared to when they were a salaried employee. Well this is likely because those small business owners are trying to run a business alone, and forget they were a salaried employee for a company with groups of people.
If this sounds like your situation, start thinking of the smaller tasks you can outsource cheaply. You can hire virtual assistants for many common administrative tasks, such as email management, following up on leads, hunting down listings, and any other number of tasks that cost you hours in your day.
Websites like Upwork, Simply Hired, and even LinkedIn will help you find the right people for the tasks you need to hire for.