Tuned in to watch the ball drop in Times Square? Check. Bottle of bubbly chilling with the cork ready to pop? Check. Someone special lined up to receive that delicious first kiss of the New Year? Double check. Real estate investors are particularly adept at setting short-term goals, especially when it comes to New Year’s Eve festivities.
But New Year’s is also the perfect time to make resolutions for your real estate business in 2020—because there’s always room for improvement. Here are the top 7 real estate investor resolutions for 2020 that can help take your business to the next level.
Tip #1: Network more, meet people, maybe even find a mentor
Networking is the lifeblood of any business, especially for real estate investors. Winning in real estate is as much about who you know as what you know. A great article in Entrepreneur outlined 5 essential tips for networking in real estate:
- Maximize your online presence with your own professional blog and website – in today’s digital age people do absolutely everything online, so if you’re not there you may as well not be anywhere
- Social media for business – outlets like Facebook, LinkedIn, Twitter, Instagram, Pinterest, and so many other services provide countless free opportunities to let prospective clients learn about who you are, what you do, and how you can help them
- Face-to-face industry conferences and events – help your online efforts come full circle by letting people put a face to the virtual one they saw on the web and maybe even connect with a mentor to help your business grow
- Give back to the community – by volunteering and sponsoring local events just like Blackstone Group does, the world’s largest real estate private equity firm
- Build a team that’s trustworthy and competent – let’s discuss that in detail next
Tip #2: Round out and keep building your investment team
All real estate investors have a team, whether they realize it or not. In the world of investment real estate there are countless people proving specialized services that help a business grow: Attorneys specializing in real estate and contract law, licensed property managers and leasing agents, marketing specialists, bookkeepers and CPAs, appraisers, contractors and subcontractors, handymen and landscapers . . . to name just a few.
One of the nice things about today’s digital world is that much of a real estate investment team can be virtual. In fact, many successful real estate investors don’t spend money on old-fashioned bricks-and-mortar office space. That’s because the more that can be done less expensively online, the more money there is available for investing in real property.
Tip #3: Reset your goals to boost your personal return
Complacency is the main reason why real estate investors eventually see substandard returns.
In addition to making and keeping their New Year’s resolutions, successful real estate investors always review and reset their goals each and every year to improve their personal returns:
- If net cash income was $100,000 in 2019, aim for 10% more in 2020 and put down in writing the specific steps to take to make $110,000
- Understand how a low interest rate environment can benefit you as an investor heading into 2020
- Conduct proper rent estimates to maximize your cash flow
- Grow the contact list by networking more, increasing social media marketing, and giving back to the community
- Make a list of 10 different ways to automate, digitize, and scale your business for faster growth and increased profitability
Tip #4: Scale your business for rapid growth
The more time a real estate investor has to spend being actively involved in his or her business, the less scalable the business will be.
One of the easiest ways to scale a real estate business is to automate tasks that the investor or team members would normally do. You can do this with employees, technology, and/or systems. Here’s a before and after example of how to scale a real estate rental business:
- Before scaling: The investor compiles a list of prospective properties they want to make an offer on. After conducting the research, the investor puts this into a spreadsheet. The investor then sends our letters to each property owner, soliciting their interest in selling. As a follow-up, the investor then makes phone calls to the prospects. In the end, the investor has a screened list of potential deals.
- After scaling: The investor writes a one-page procedure document on how to source deals. The investor then hires a part-time Assistant. The assistant follows the instructions laid out by the investor and compiles this list of prospects, send out the flyers, and then make the follow-up calls. The investor then gets the list of hot leads, with having only spent minimal time. The key to scaling is repeatability, and this example is certainly that.
Tip #5: Digitize, because using paper is so 2019
There are lots of other ways to scale a real estate investment business by digitizing as much information as possible.
Modern cloud-based real estate software systems give investors a quick, easy, and free way to track, manage, and communicate the performance of real estate portfolios. Online investment real estate management software provides investors with four critical features that help boost scalability and profitability:
- Reporting dashboard offering user-friendly property performance information at a glance
- Tax-ready financials simplifies tax time, saving investors both time and money
- Income and expense tracking combined with machine learning helps investors stay organized and maximize deductions
- Bank-grade security ensures your private data stays private
Tip #6: Laws keep changing and so should you
Politicians feel like if they’re not issuing new laws they’ll be out of a job, thus the odds of real estate rules and regulations not changing from one year to the next are slim to none.
Astute real estate investors know that an ounce of prevention is worth a pound of cure. Some easy ways to get up to speed on the latest laws regulating the real estate industry include:
- Subscribe to email lists of the National Association of Realtors and the local real estate board
- Join industry organizations like REIA to network with other real estate investors in your area and learn from their legal mistakes
- Taxes — Understand new tax laws and deduction opportunities
- Take a lawyer to lunch because, well, lawyers are people too and they’re interested in your business as much as you’re interested in theirs
For instance, Opportunity Zone legislation has been in the media lately as a critical new opportunity for real estate investors to reduce their tax burden. Get to know these types of laws and initiatives.
Tip #7: Expand your comfort zone by learning something new
As Robert Kiyosaki once said,“The most successful people in life are the ones who ask questions. They’re always learning. They’re always growing. They’re always pushing.” Successful real estate investors push themselves out of their comfort zone by constantly learning new things.
They’re able to stay on top of the newest technologies affecting the real estate business and keep one step ahead of the competition. Four of the best ways to learn new about changes in real estate are:
- Following the latest trends by reading the latest industry reports and newsletters
- Networking more and increasing the size of your contact list
- Rounding up and improving your investment team with people who add value to the group
- Leverage the newest technologies to scale and grow your real estate business
Ringing in the New Year with the right real estate investor resolutions
Before the ball drops in Times Square, before the champagne toast, take some time to make a list of your own top real estate investor resolutions for 2020.
More networking adds more people to your contact list. The more people you can reach out and touch with email, phone calls, cards or letters, the more your income will increase. And speaking of making more money, create an action list of specific steps to take in 2020 to boost your profits by 10%, 15%, or more – then be sure to take concrete action.
No real estate investor is an expert in everything. That’s why rounding out a real estate team is so important. Having people that bring something extra to the table is the way that more real estate deals get done and more money is made. Expand your comfort zone by learning new things and stay on top of the latest laws and regulations in your market.
Last but not least – develop a plan to scale and digitize your real estate investment business. Real estate software systems provide investors with a reliable way to analyze the performance of investment real estate. Happy New Year’s and here’s to a productive 2020!