To Be Successful, You Need To Treat Property Investing As A Business And Not Just A Hobby

Category: Finance, Real Estate.

Every property investor will agree that without tenants you do not really have a property business. This rent will be used to pay for: .Your mortgage repayments. .Recurring property maintenance. .Fixtures and furnishings in a furnished property.

Your tenants will pay the rent set by you. Any money left over will be used by the property investor for. .Advertising. .Finders fees for further property acquisitions. .Further acquisition financing costs. .Legal fees. .etc. To be successful, you need to treat property investing as a business and not just a hobby. As you can see, there are numerous expenses here. I know of a lot of people who have tried property investment only to find that their costs far exceed any income. As with any business you need to look for ways to reduce costs or increase the income. This is certainly NOT the right way to run a successful business.

Now the only way for you to increase the money coming in would be to increase the rent. If you were to increase the rent over and above the rent dictated by the market you may never be able to rent out your property. This is not as easy as it may at first look. A tenant will only ever pay market rent unless your property is one of the best properties on the market and in an exclusive area where it is very difficult to find rented accommodation. You must therefore focus on reducing costs. Unless your property meets the above two criteria, I would forget about increasing the rent.

One way to reduce costs is by making the best use of your tenants. I have often asked tenants to paint my properties for me! For example, you could ask your tenants to do a lot of the simple upgrading tasks on your property for you. If I supply the paint in a colour that is agreeable to both myself and the tenant I find that they are only too happy to paint the house for me. Hence they often stay longer resulting in fewer voids. By painting the house, the tenants feel more involved in their property and also house proud.

I also make it clear to tenants that I am looking for other properties in their area. This is another way to find that elusive deal. If they know of any vendors that may be looking to sell, please let me know. I am happy to pay the tenant a finders fee for this service. I normally ask them to put a notice up at their place of work or local pub. Finally, when a tenant decides to move on, I ask them if they know of anyone that might want to rent the same property. Again, I will offer the tenant a small financial incentive if they are successful in finding me someone.

Im sure you can probably think of a few more ways your tenants can help you run your business. This financial incentive is far less than it would cost me to advertise the property, hence Im saving money straightaway. The bottom line is that you must treat your tenants as an asset and help them help you grow your business.

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