As we give 2016 the boot, we can tackle the new year with renewed vigor! Enthusiasm! Spirit!.
For real estate investors, a new year is a time to really refocus and redouble your efforts. Are you really honed in to your goals, or have you been stuck in a rut?
If so, don’t let it stay that way! If you aren’t content with the way things have been in the past year, now is the time to take charge of your financial future. The beauty of real estate investment is that you have say. You have control.
So get back in the saddle and get stuff done!
These are eight essentials for every investment property: things you can do, all the way from the top, down to things you and your property management can do to increase your efficiency, value, and, ultimately, the positive cash flow you see every month.
9 Things to Do For Your Investment Properties in the New Year
1) Evaluate Your Numbers
Nothing is more important—or more reliable—than your numbers. In this new year, sit down with all of your numbers and re-evaluate how the last year has gone. It’s not likely that you will have missed major failings in cash flow, but it’s possible that your expenses were higher than you anticipated and that you weren’t making as much money on your properties as you could have. So evaluate, see where you might be able to cut on costs, and decide where you would like your cash flow to be.
2) Observe Market Changes
A lot can happen in a year. Look at how your markets have changed—not only in terms of home prices and rental prices, but demographics, population, and economic growth. This can help inform your decisions as you plan to buy or sell properties in the new year, or make adjustments to your rental prices.
If you plan on tackling an new markets this year, start gathering contacts and data for those area, too.
3) Set Clear Targets & Make Actionable Tasks
What do you want out of 2017? Think about your goals for income, how many properties you’d like to buy, how many you would like to sell, and generally what you need. From your targets, make tasks for yourself so that you can take the steps towards meeting your goals: both the short and long term.
4) Plan Strategic Adjustments
For your individual properties, what adjustments do you need to make? Consider where you can cut costs and increase efficiency. It may be cutting your energy bill by installing energy-efficient appliances, low-flow plumbing fixtures, or checking that your walls and attic are properly insulated. These little adjustments add up to big savings over time.
By the same token, do you need to raise rent? Think about the changes in your area—are your prices still competitive?
5) Ask “What Isn’t Working?”
Troubleshooting is never fun, but it has to be done. What isn’t working about your current investment strategy? Or your current properties? Even if things are working smoothly, you can always find something to make better. But it could be that you’ve been hanging on to something that just isn’t working—maybe it hasn’t been working for a long time. It might be time to cut out a property, change a strategy, or dump a bad manager. Don’t make excuses for the things that are holding you back from success!
6) Ask "What is Working?"
Just as important as troubleshooting is the opportunity to find, evaluate and celebrate what is working. You may have had a high number of expenses or even suffered a set-back with a vacancy. Even still, your property or portfolio has a positive return for the year! You are in the black. You made money!
Maybe you are one of the 60%+ of clients who had no vacancy in 2016 or had no maintenance issues in 2016. Those are both huge reasons for celebration. For all of the chatter that goes on in chat rooms about the disappointments in real estate, the fact of the matter is that most investors have an overwhelming positive experience and a positive return.
7) Check for Winter Weather Issues
A small but no less important issue—winter weather can cause big problems, even in warmer, balmier areas of the country! Make sure your managers are being diligent with precautions and regular check-ups. Slip and fall hazards from icy patches on sidewalks and driveways, clogged gutters, strained heating systems, frozen pipes, water damages...watch out!
8) Plan for Renovations
Do you want to do renovations on your properties this year? Go ahead and plan! Think about the when, the what, and the who. Start setting aside those funds, planning the time line and contingencies, getting estimates and bids if needed, and looking at all of your options. Think about your return on investments and seeing where you’re going to get the most bang for your buck.
9) Tackle Unfinished Business
We can’t pretend that 2016 didn’t happen. It’s likely that there are some loose ends to tie up. If you left some things behind in last year, don’t leave it—get it down, tie it off, and move forward. That includes your mistakes. If you feel regret, embarrassment, or loss because of something that happened in your investment year in 2016, don’t let it stop you from a good 2017. Learn what you can from your experience and choose to be productive.