We’ve all heard the saying “the devil’s in the details.” Less common but no less true is the counter, “God is in the details.” It’s the idea that paying attention to small things has big rewards! The details matter, and it’s no less true when it comes to real estate investment.
For owners, we tend to take a big picture, bird’s eye view of things. While this can be highly beneficial when it comes to strategy, planning, and overall efficiency, we do lose something when we’re not minding some of the details.
It’s all-too easy to get so detached from what’s really happening that we miss out on real opportunities that are right under our noses. All it takes is paying attention to details!
5 Important Details That Lead to Real Estate Investment Success
When we think about little details in our own lives as it relates to real estate, we likely think about the physical characteristics of a property. But that’s not really what needs the most consideration when it comes to your rental properties. Sure, they can matter, but they aren’t going to be top-of-mind for most renters.
What will impact your long-term cash flow is your resident services: things that help resident retention and help maintain quality residents. What do we mean? One, make paying rent easy. A lot of investors just assume residents can just drop off a check or cash with the property manager and that’s easy enough. But in this day and age, it’s really not. With most bills being automated and payable online, we have to catch up, too.
There are many platforms out there that allow managers to collect rent online: making it extremely convenient for your residents to pay on time. This prevents you from worrying with late payments as much. There are a lot of resident amenities that should be on your radar, from online rent payment services to something as common sense as on-site washers and dryers. Keep convenience at top-of-mind and you’ll find your overturn reduced and cash flow steady.
From the get-go, invest in a good system for keeping track of your records. There are plenty of investors out there who regret not paying mind to good bookkeeping from the very beginning. They don’t care to really organize their paperwork or have a good system, so when tax time rolls around, it’s a stressful mess and it takes much longer than it should.
Invest the time into developing a good system, get a good file storage system (digital or physical), and figure out who will be handling your accounting.
The Fine Print
Real estate investors deal with a lot of legal stuff. It can be easy to get to a place where you think you know it all, but it’s so important to always read the fine print and make sure you understand the terms of everything you’re signing onto: whether you’re buying a property, entering a new lease agreement with a resident, dealing with taxes, or taking legal action.
Don’t skip the crucial first step of carefully reading, re-reading, and comprehending what you’re looking at. You don’t want to get duped or burned later on because of a misunderstanding, exploit, or oversight.
For real estate investors, a lot of the advantages to our business comes from tax breaks and benefits each year. Sadly, there are a lot of investors who still overlook or stay clueless about the tax benefits that they could be taking advantage of! It’s a detail that could be saving you a ton of money. It’s so important for investors to find a good accountant who is knowledgeable in investment finance—they can help you navigate it all.
Lastly, there are details to mind in our investment properties themselves. Obviously, there’s a responsibility for our managers and maintenance teams to pay close attention to upkeep and repairs, but there’s just something to be said for detail when it comes to quality, too. Most residents aren’t looking for perfect, but a thoughtful property that considers what residents really value: storage space, natural light, a good layout, clean and updated fixtures, etc., the better time you’ll have finding and retaining residents.