Many people think finding the good deal is the hard part. They spent many hours looking and searching for the right deal. They crunch the numbers over and over again. They make numerous calls, and walk through many attics and basements, Florida notwithstanding. They get their hopes up, and then dashed within the same twenty-four hours. They check the neighborhood, and research, check, and then double check market values. They write up offers, many with low, almost ridiculous prices. After many hours spent, sacrifices made, offers countered and exhibiting much persistence, they have an offer accepted. Now the hard work begins.
While it may seem that finding a profitable deal is the hard part, it will mean nothing if you don’t know how to manage your real estate investment. Especially in today’s depressed real estate market, finding the profitable deals is the easy part. Managing real estate correctly will make or break the investment. On the surface, it seems pretty simple. Rent the property to a good tenant, collect the rent, and pay the bills. Sometimes it is that simple. When you have a decent tenant who pays the rent and keeps the property clean, it makes life so much better. But as many real estate investors know, all tenants are not created equal.
One of the first steps to managing real estate is to choose the right tenant. Many investors learn how to manage their investment the hard way. Some tenants are decent, upright, honest people. Other tenants do things that border on being criminal. Managing real estate is more than just managing property, it is also managing people. Although it may sometimes seem difficult finding that right tenant, it is many times much more difficult getting rid of that tenant. There are a lot of good books to read that give terrific advice and suggestions on how to manage your real estate investment.
To some people managing people and real estate comes naturally. Other people will continue to learn from each property. And to those that choose not to manage their investment, they can always hire a property manager. When you hire a property manager, you will need to work this cost into your budget. They will end up saving you time, and may end up saving you money. You won’t know the true answer to this until after some time has passed. After a while you will learn by necessity how to manage your investment. Just when you think you have seen and done it all, something will happen that will leave you dumbfounded.
If you have a property where years later you have no very interesting stories to tell about your tenants, consider yourself lucky. If you could own a property and did not have to deal with tenants, your investment would be so much easier and carefree. When you are giving serious thought on how to manage your real estate investment, remember that your time is valuable, your property is valuable, and the tenant that you decide to rent your property to should also hold a high respect and regard for your time and property.
Pat Esposito is an author, an entrepreneur, and a runner. He is the founder of Selfpublishauthors.com and the author of The Informed Real Estate Investor.