Without question, there is one key lesson that I have learned throughout the years that has helped me in running a successful real estate investing business.
It is something each and every successful business needs: profitable business systems.
It is something I never took time to think about before, but virtually every business uses them.
If you go into any chain store or restaurant, you will see the same exact operation. This ensures the same successful outcome and the same profit level each and every time.
Take the Subway sandwich shop. You place your order, and the sandwich preparer makes your sandwich. All the ingredients are laid out the same in each store, and the process moves swiftly. You get to the end of the line, and another person rings up your order and offers you a beverage and collects your payment. You receive your sandwich and a paper cup to take to the self-service beverage center to collect your drink. Any store in the country you walk into will operate the same way. You as a customer know what to expect at each store and know your sandwich will taste the same, regardless of which store you stop at. This also helps to create customer loyalty.
Run you real estate business with systems, and your results will always be the same.
Once you have made an investment that works for you, you want to duplicate that same process every time. If a challenge occurs with your investment you may need to make alterations, but once you perfect the process you want to repeat to make sure you always duplicate the success and the rate of profit from any investment. Here are the 3 key systems to implement:
Tenant retention
Remember it is their home and you want to give them reasons to stay.
Start with your existing tenants. Do they know exactly what they can expect month after month and year after year from you, the landlord? If they moved from one of your rentals to perhaps a different property of yours that is a larger unit, will their expectations be an exact match to your last property? Will they be compelled to be a repeat customer? Once you perfect a management style that is mutually respected, they will begin referring friends to you for their rental needs. You will want to duplicate that process for each and every rental unit. Here is a sample of the 9 bullet points I implemented to insure a duplicated tenant retention.
Your written investment plan should be your investor’s guide
Every aspect of your real estate investments that works effectively should be duplicated to re-create your expected outcome. When you write down all the systems in your investment plan, it is easy to make investments. You simply refer to your plan. There are numerous items I always incorporate into each and every one of my investments, such as the process of how I will look at investments to the actual product that I invest in.
Keeping and maintaining profitability
It is said that it takes a smart man to make a million dollars and it takes a man who is 10 times smarter to keep it. Not sure where I first heard this, but I can assure you I totally retained this phrase.
Profitability is why we invest in the first place, so once we earn the profits, we want to keep them. I suggest you write down what you find that worked really well and duplicate it within your written plan. You also want to do proper tax strategy sessions with your tax preparer to make sure you are keeping the maximum amount of your money. As you know, the IRS is eager to get a piece of each dollar you made. There are many things you can do to avoid paying maximum taxes at tax time. Take a peek at some tax strategies that my investor clients and I utilize to hang on to the profits we make.
I trust you will find establishing a system for everything that works effectively for you will result in more consistent results that will make investing more enjoyable as well as more profitable.
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