How to Manage Your Real Estate Career For Maximum ProfitsPosted on November 26, 2013 by
Investing in real estate is profitable, fun and there are times when it can be psychologically rewarding. The real reason why you are doing it though, your motivation, has a lot to do with total financial freedom and with the ability it will give you to dictate your own future away from money worries and pressures that have anything to do with finances.
This is why the decisions you make in your real estate career are going to affect your purchasing record and the way you operate as an investor in terms of identifying the correct market to target.
The thing to remember when you are working in real estate is that it takes almost the same amount of time, effort and attention to detail to close a small deal as it takes to close a large one so there’s no real reason you should not be closing large deals all the time and for that you need to get into the frame of mind that allows you to identify specific goals within specific time frames.
When you set yourself restrictions like that you realize that the advantages and the returns offered by multi-family dwellings totally outweigh any perceived disadvantages. Let me explain in a little more detail. When you look at multi-family dwellings you do so with one of two specific goals in mind: a long term multiple income stream from rentals or a bigger pay-off down the road with a bigger sale.
None of these two are available to the real estate investor considering the smaller-scale single-family dwelling option. Single-family dwellings, which is what most real estate investors think about first, have a number of risks associated with them which are the same as those associated with larger projects such as multi-family dwellings, but the rewards are much smaller.
A house you keep to add to your portfolio and rent out is as prone to being vacant during a tenant change as an apartment but will offer you none of the protection of having the income from other apartments in the block taking up the slack during those vacant months. The same applies to repairs and damages. This means that if you are a little bit unlucky a couple of vacant months or a single large repair bill can wipe out your profit for the year.
Multi-family dwellings however share the risks amongst each of the tenants. This places less of a burden on each of them which makes it less likely that they will default on payments or skip out on you suddenly. The scale also makes it easy to put in place a management company which will deal with tenant issues for you and this means that you will be free from many of the perceived obstacles which you would otherwise have had to deal with had you been dealing with just a single-family dwelling.
It is exactly decisions like this which allow you to make steady progress in your real estate career and achieve the financial freedom you crave.