Why You Should Treat Property Investing as a Business
How active you are as an investor will depend on how many properties you own and the time commitment you want to give to your rental house investment business.
Are you a business owner?
When you become a property investor you also become a problem solver:
- you are looking to purchase from someone who wants to sell
- you have to find finance
- there is the decision about whether money needs to be spent on your rental property to upgrade or freshen it up for renting if you choose to buy it
- then there is the negotiating of a contract
- then you have to appoint a property manager
- then you have to solve any problems that come along such as maintenance, tenant problems, interest rate increases, etc.
As you can see, all of the steps you need to take when buying a rental house investment require decisions to be made or problems solved.
While the ability to make decisions is vital in business, it’s especially important when you’re the owner of a rental house investment because any failure to make important decisions can impact your property’s value…and your profit.
For example, if your tenant reports something that needs repair you have to decide right then and there how the issue will be resolved.
If you neglect to deal with the problem your rental house investment will drop in value and you’ll owe more for the property than it’s worth. And, you’ll very likely go missing a tenant who doesn’t want to live in substandard conditions.
How to act like a rental house investment business owner
Like any other business, a rental house investment requires both capital and a serious commitment of time to be successful.
Some things you’ll need to do when building your rental house investment business are:
- Create a detailed investment strategy and business plan
- Establish good size buffers to cover business expenses (e.g. rental vacancies, repairs, improvements, etc.)
- Put together a team of professionals who can help your business grow, such as a good finance planner, a savvy broker and a highly reputable property management company.
- Find a method for organising your own record keeping.
- Identify and establish business relationships with a collection of quality tradespeople whom you can call on when necessary.
Glass…half empty or half full?
Surprisingly, most Australians fail to become financially independent, even though we live in one of the world’s most affluent countries!
A scarcity mindset, I believe, contributes to this sad fact.
How do you know if your thoughts are standing in the way of creating a successful property investment business?
Ask yourself:
- Am I jealous when I see others being successful?
- Am I afraid to take any risks with my money?
- Do I seek out “instant gratification” in life?
- Do I think that people who have money are “just lucky”?
If you recognise your own thinking as you read these statements then chances are good you have a “scarcity” mindset, and it’s this mindset which is standing in the way of you from becoming financially free.
We fear that which we don’t understand. That’s why you must find a mentor who can help you make the mental shift from a “scarcity” mindset to an “opportunity” mindset by learning more about the rental house investment business.
Your future self, who will be living financially free, will thank you!
For more tips and information about rental house investment business, book a FREE consultation with one of our expert Investment Coaches now!
Successful Property Investors Don’t Quit Their Day Job
You need that income! One of the primary things you need to be a successful property investor is a job. Why? Because you need money. You need a job to borrow money. You need savings or some cash to buy your first property. But the sad fact is, a lot of people...
6 Ways To Speed-Up Your Next Property Purchase
Get There Faster If you are already a property investor with one or even two properties, first of all, congratulations. You’ve taken some seriously great steps in creating your future wealth and a pathway to a work-less, play-more retirement with passive...
Property investing: Five ways to create cashflow boom!
When it comes to property investment there are some things you can never have enough of.
When it comes to property investment there are some things you can never have enough of. Good tenants, reliable builders, a great relationship with your bank.
But more than anything what you need is good cash flow.
Having a steady income of cash means never having to dip into your own pocket to top up repayments, complete repairs or make another purchase.
Here are the top five ways you can ensure the cash keeps flowing, so you can keep your investment portfolio growing.
Lock it in! How to protect your equity
Don’t be caught without it.
As a property investor who is building a portfolio, it’s vital that you have access to your equity whenever you need it.
There’s nothing more frustrating than finding that perfect new property to purchase, only for it to be held up – or worse still, lost completely – because your finances weren’t in good shape.
Having an interest-only loan structure with a healthy off-set account is a great way to ensure you have equity at your fingertips whenever you need it, but that’s not the only way…