Investing in real estate is a proven way to improve your cash flow and grow your wealth. However, just because you have a portfolio of rental properties doesn't mean you're guaranteed to hit a home run.
Often, what makes the difference between a successful and a failed investor is the real estate asset management strategy. If you'd like to equip yourself with real estate asset management best practices that are used by successful investors, you're in the right place. Read on!
Prioritize Property Inspections
A physical real estate asset, like a rental building, is subject to wear and tear. Even when it's not occupied by a tenant, weather elements can still cause some damage.
Conducting regular property inspections is recommended because it enables you to assess the condition of the asset and detect issues before they become major repairs. You can then do preventative rental property maintenance as needed, which will go a long way in reducing your long-term repair expenses and enhancing the durability of the buildings.
It's a smart practice to create an inspection schedule rather than conducting inspections randomly but frequently.
Leverage Technology
As an industry, real estate isn't known for pioneering cutting-edge technology. In today's digital age, some landlords still use good old money orders, cash, and checks to collect rent.
However, this doesn't mean you stick to tried and tested real estate asset management methods. Used correctly, the right technology can maximize your revenue, minimize risks, and make your job easier.
For example, investors are using IoT sensors together with data analytics programs to optimize energy usage and predict maintenance needs. Tenant portals make it easier to onboard tenants, administer leases, and collect rent.
As technology advances, more options are becoming more available to real estate investors. Stay abreast of these developments, but remember that not every solution is right for your needs.
Draw a Comprehensive Financial Plan
You're a real estate investor, but you're also running a business. Your rental properties need to generate income and make a profit.
So, like every business owner, you need to have a financial plan, complete with income projections and maintenance budgets. This way, you'll be able to track the financial performance of each asset in your real estate portfolio.
If you have several assets, your finances will get complicated. It's best to hire a professional accountant to help you manage your finances.
Upgrade Your Properties
Maintaining and repairing your investment property is important, but over time, it will become less appealing to tenants. As newer properties with better features come up, your properties will command less rent.
The solution to this is to invest in rental property upgrades. If it's a rental property, upgrading the flooring, bathrooms, and kitchens will help increase their rental value, or at least maintain it.
Real Estate Asset Management Done Well
Sound real estate asset management is the key to being successful in the world of owning investment properties. Keeping your properties in great condition, planning your finances, and leveraging technology will go a long way, but you also need professional support.
Established in 2016, HomeRiver Group is a national residential property management firm dedicated to serving property owners and their tenants. Our services include brokerage, leasing management, renovation, and maintenance.
Contact us today to speak with an expert.
