Housing

It’s often said that it takes money to make money, and for most people, that’s a true statement. Once in a while, you’ll find crafty people like Kyle MacDonald, who traded a giant red paperclip for a two-story house. However, those people are rare.

If you’re a property investor you need to spend some money to become profitable. The following expenses are essentially a required component in your profitability.

Property management services

Being a profitable property investor requires that you have as much free time as possible to acquire additional investments. You might make a little money with one or two investments, but you’ll never become profitable that way.

Hiring a property management company is like handing off all of your landlord duties to a dream team. Most property management teams have decades of experience selecting tenants, collecting rent, and handling evictions.

Before committing to any services, a reputable property management company will assess your properties at no cost and let you know what service fees you can expect. For example, Green Residential will perform a free rental analysis for Austin property owners before they sign up for any services.

As an investor, your time is worth far more than a little bit of cash. If you’re managing your own properties, consider paying a professional team to take over so you can expand your investment portfolio.

Software and mobile apps

They say time is money, but actually, productivity is money. Time won’t pay your bills.

Managing your time, tasks, and priorities with digital tools will make a huge difference in your productivity. If you’re still using to-do lists written on pieces of paper or yellow sticky notes, digital tools will greatly improve your ability to complete your daily tasks and reach your investment goals.

While some digital tools are free, others cost money. However, don’t hesitate to pay for software that will keep you organized and on track. Invest a little money in your own productivity and profitability with the following tools:

Fundrise. Plenty of experienced and new investors are turning to real estate crowdfunding investment opportunities. As an investor, Fundrise is a great way to find new investments that won’t require your physical effort to manage.

Rentometer. If you own single-family home investment properties, this app will help you determine the market rate for rent in a given area, which may not match what current tenants are paying.

Personal Capital. If you’re not tracking your finances, how will you know when you become profitable? This app makes it easy to track both your personal and investment finances, including income, cash flow, and net worth. You can also link your investment properties to get estimated current values calculated by Zillow. Personal Capital is free, so it will only cost you a few minutes of your time.

Landlord Studio. An app that lives up to its name, Landlord Studio will automate a large portion of your landlord responsibilities. For instance, you can import financial transactions, track rental payments and expenses, generate organized financial reports for your tax professional, and more.

There are additional real estate investor apps on the market so check out all your options. Chances are, you’ll find what you need.

Invest in a professional CRM

Customer relationship management software is critical for managing leads if you flip your properties. It’s no longer acceptable to keep track of leads in a standard email account. You need the ability to segment your leads as they come in so you know what marketing emails to send people. Some leads need to be nurtured, while you can be direct with others.

A good CRM will cost you a monthly fee and it’s worth every penny. You’ll maximize your profitability by segmenting leads and automating your email marketing efforts.

Property improvements

Presentable properties get more interest than properties that look as if they are falling apart or haven’t been maintained. Any improvements you can make to your investment properties will contribute to long-term profitability. For instance, you’ll get a higher number of interested buyers or renters, and your vacancies won’t last long.

Becoming a profitable real estate investor costs money

Being successful in the real estate industry requires investing money to some degree. This isn’t surprising, since most industries are the same. However, these expenses are just part of doing business, and ultimately, these investments directly contribute to your success.

If you want to build your wealth through real estate, try GROUNDFLOOR. It is a wealthtech company and it offers real estate DEBT investments to the general public.

Building a new home is an exciting prospect. You get to build your dream home from scratch, hand-picking every detail. All new materials, all new plumbing and electrical; you get to bypass any of the traditional worries that a pre-owned home comes with. Despite all of the benefits, there are some drawbacks as well. Namely, it is very easy to overpay for a new build. The good news is, you can save money on new home construction by taking a few steps to prepare and choosing materials wisely.

Set a Budget

This budget will be a “base budget”. This means that it won’t include any upgrades you plan to make to the house, just the necessities and materials to get it, and the lot it sits on, ready for move-in. Make sure that this budget has a hefty amount of wiggle room, because you will definitely want upgrades. It is vital to stick to this budget, and make decisions based upon keeping it in tact. this will ensure you don’t get out of control when all of the materials and build options are laid in front of you. It is a good idea to get with a financial advisor for this step, because a budget that you can’t afford is as bad as having no budget at all.

When working with your builder on the cost of your home, make sure you see exactly where each penny is going. Have them show you, or write down yourself, exactly what you’re spending and where. This will help you make concessions when you start to reach the end of your budget, and it will save you a lot of headache. It can also help to label everything with a priority level, which will remind you what you’re willing to cheap out on and what you aren’t.

Start Basic and Upgrade From There

There are a lot of upgrades that your builder will offer for which they won’t make the best deal. Things like light fixtures, for example, have a ton of variety. there are many shops that sell them, and you can probably find higher-end fixtures at a better price outside of your builder’s inventory. Start with the baseline fixtures that your builder offers, and keep an eye out for deals later.

Don’t Sleep on Synthetic Materials

Fake wood floors and synthetic countertops are great ways to land high-quality finishes for a better price. Vinyl panels are a great way to ensure you have a tough floor that can stand up to anything, while not absolutely demolishing your budget with hardwood floors. Same goes for Solid Surface countertops. These materials aren’t “cheap” in a low-quality sense. They are just a less expensive product to make, and often hold a few advantages over their natural counterparts. One of the most distinct advantages is the accessibility and variety of them. There are loads of colors and finishes in which these surfaces come, and they are easy and cheap to manufacture. This makes it so you don’t have to worry as much about stock.

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