Your Real Estate Business is more than just a Hobby
Most investors or realtors entering the real estate industry do so with a lot of zeal. However, they fail to build their real estate portfolio beyond their first property purchase. While socioeconomic factors may contribute to this failure, perceiving real estate business as a hobby contributes significantly to failure. Sure, you may have passed your real estate exam and created a good plan. However, things will start going southwards when you start handling your business like a hobby.
It’s time to get off that hobby horse
The real estate industry is changing very fast. In recent years, you may have noticed unique trends regarding potential buyers’ relationship with the entire real estate market. More than ever before, nearly everyone has access to market analysis, data, tech, and expert opinions that about a decade ago were reserved for individuals who actively made their living as brokers and real estate agents.
Generally, most hobbies are cheap, and even the costly ones are all about the enjoyment of the activity. With such interests, you can act carelessly because you may have nothing to lose. For instance, you may lose nothing if you don’t play your guitar for an entire month. You can still play it when your fingers start itching. What about real estate business? It doesn’t work that way.
You need a robust system in place
Approaching a real estate business, haphazardly will lead to a broad range of issues. While you can learn more about a real estate exam online, get your license, and let everyone know you’re a licensed realtor, you need to approach your business systematically. Learn the basics and create a good plan.
You should learn from your mistakes and adjust your system to avoid such mistakes or similar ones in the future. A disorganized approach will definitely cost you in different sectors of the real estate industry. Whether you focus on property acquisition, marketing, rehabbing, negotiation, financing, selling, leasing, accounting, collections, or maintenance, you need a systematic way of doing things.
Manage your cash flow
Cash flow is like an engine for every business, and real estate isn’t an exception. Make sure that you have adequate cash to finance your daily business operations and also fund the deals you are working on. Never let all your business’s cash get tied up to the point where nearly everything is hanging on a few deals, and if they fail, you get broke. Just like all other forms of businesses, you need to anticipate expenses and your business’s cash flow requirements.
Real estate business is about money, and as the entire industry has revealed over the last couple of years, getting careless in real estate is a good way of losing money – lots of it. If you are an agent, you are what’s known as an independent contractor. That means you must manage your business wisely. If another agent picks up your slack, they aren’t handing it back to you.
Always handle every aspect of your real estate business professionally.