What Real estate investment management is

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Many real estate investors buy real estate to use for income, but they aren’t really sure what all that entails. They think it just means that you get a property, rent it or sell it, and collect the money. Managing your real estate investments requires so much more than that.

Find out the basics.

There are classes and training from your local apartment association to help you get started on your rights and your tenant’s rights. There are also books available to help you brush up on the subject. Before you put out that first for rent sign, you need to have the essential knowledge to protect your interests

Running the show

Owning and operating an apartment is not cheap. There are a lot of expenses you wouldn’t think about that are involved in running the day to day operations of a real estate investment property. In order to increase the cash flow from the property, your goal is to be as efficient as possible with repairs, materials, and customer dealings so you decrease your expenses.

Over time, these are some of the expenses you will have to budget for:

Advertising                         Credit checks                                     Eviction services                               Insurance

Legal services                    Maintenance and repairs             Office equipment and supplies

Property management  Property renovations                     Utilities

Taxes, including business tax, property tax, and local, state, and federal taxes

Dealings and Discrimination

When dealing with tenants or clients, make sure that everything is in writing and follows the guidelines for Fair Housing. Fair Housing prohibits discrimination based on race, gender, age, disabilities, marital status, sexual orientation etc. If you violate these laws, you can have a serious lawsuit on your hands.  To be fair, make sure all adults on the property sign the contract agreement. This means they all agree to uphold the terms of the contract, and it covers your end in case any legal issues arise with one of the employees.

Your contract agreement should state everything from how maintenance procedures are handled to when rent is due. The type of rental contract plus the amount of the rent should be clearly stated, as well as any deposits or fees and how they may be returned if applicable. Having a lawyer read through your contracts is a good idea. They can spot any legal issues and help you to correct them.

Maintenance Issues

Assign maintenance issues to one of the three levels of importance:

1. Do Now, Emergency

2. Do Later, Not an Emergency

3. Do When Extra Money is Available

Establish an easy to do notification system that tenants can follow through with. It should be convenient and easy to understand. It may be a twofold system (i.e. if it is an emergency call this number. If it is not an emergency, call this number.)

Stay on top of maintenance/repair needs. Your real estate investment properties must stay in compliance with the local housing codes. Plumbing or HVAC problems should be handled within one day. Keep the renters informed during the repair process to avoid later legal issues.

This is just some of the issues that real estate investors must consider before getting their first real estate investment property. For more information on real estate investment or real estate franchise opportunities, visit us at Homevestorsfranchise.com.

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