The real estate investing business consists of many different components. One of the most important ones is financial planning. Financial planning is a big part of every real estate investor’s career. It is essential to calculate and manage your budget properly in order to make money out of real estate investments. While many real estate investors prefer to do their own financial planning, others decide to hire a certified financial planner. But do you really need to hire a certified financial planner for the success of your real estate investing business?
What Is a Certified Financial Planner?
A certified financial planner, also called a financial advisor, is a licensed professional who gives you financial advice or guides you through a financial process. Financial advisors can provide various services. Such services, for instance, are: real estate investment management, tax preparation, and calculation as well as retirement planning and so on and so forth. The benefit a certified financial planner has is the fact that he/she has carefully examined various financial processes and has advanced knowledge and experience in financial planning. In this sense, it is always better for your real estate investing business to work with a professional in the financial field. However, since financial advisors have specialized in general financial planning, you need to be careful when hiring such a professional.
What Kind of a Certified Financial Planner Should Be Your Real Estate Partner?
If you have decided to hire a certified financial planner for your real estate investing business, there are a couple of things you need to take in mind:
#1 Real Estate Financial Advisor
One of the most important things is to make sure you are hiring not only a financial advisor, but one that is experienced in the sphere of real estate. The latter plays a key importance in the success of your real estate investing business.
#2 Being Real Estate Investing Business Partners
Another important thing is to take the certified financial planner your real estate investing business partner. It is advisable that you share a common vision about the real estate investing business. In this way, your communication will be easier and more efficient. Before hiring a financial advisor, discuss your real estate investing goals, ideas, etc.
#3 Hiring a Professional
Last but not least, be sure you are hiring a CERTIFIED financial planner. It is important to work with a professional if you want to achieve the best real estate investments results. Take your time in finding a financial advisor to ensure the success of your real estate investing business.
Why Do You Need a Certified Financial Planner for Your Real Estate Investing Business?
Certificated financial planners can be of great help in developing and growing your real estate investing business. In addition to assisting you in the creation of your financial plan, here are some of the reasons for hiring a financial advisor:
#1 Retirement Planning
Many real estate investors are looking at the current moment and forget to think about the future. As most of them are self-employed, this is an important step to take. Other real estate investors just feel overwhelmed, while trying to create such retirement planning. A financial advisor can be of great help to you. Professional financial planners are experienced in creating retirement plans and can provide you with the best advice. Even though this is not such an important issue in your current real estate investing business, it is a necessity for your future well-being as a real estate investor.
#2 Analyzing the Trends in the Real Estate Investing Market
Sure enough, the successful real estate investor keeps track of the trends in the real estate investing market. However, this does not only include the hottest investment properties, locations, etc. It also means analyzing the best positive cash flow deals as well as what deals have a potential future development in the real estate investing business. A certified financial planner has easy access to such data and can analyze it precisely. This might be of great help for the growth of your real estate investing business.
#3 Preparing the Best Real Estate Deal
A financial advisor can help you in deciding how much to bid on an investment property, based on the current real estate market as well as you assets. Not only can a certified financial planner help you prepare the best real estate deal by analyzing the housing market, but he/she can also tell you the best way to invest in a real estate property. This may include what funds to use, whether you should consider leverage, if yes – what kind of, etc. All these decisions might play a significant role in your real estate investing career.
#4 Real Estate Investing Tax Advice
Calculating taxes on an investment property is surely one of the most complicated tasks of a real estate investor. Luckily for you, professionals such as financial advisors can deal with this process for you. Certified financial planners actually investigate your previous tax payments and returns along with the current taxation process. In this way, they can find patterns and help you in establishing the best way to pay your taxes and take advantage of the tax breaks.
#5 Analyzing the Long-Term Picture for Your Real Estate Investing Business
Due to the extensive financial knowledge they have, financial advisors can see the long-term picture for your real estate investments. Additionally, they can predict the potential development of your real estate investing business. This is extremely beneficial when considering investing in a new real estate property or trying to create an action plan for your current real estate investments.
#6 Helping You in Managing Your Residential Real Estate Investing Properties
When it comes to residential real estate investing, a financial advisor is a necessity. Many real estate investors find it hard to decide when the time has come to sell their residential property. Certified financial planners can help you in this decision. They know what the current state of the real estate market is. Moreover, they can predict how the market will develop in the near future. The same is valid when it comes to the question how much to charge for rent. Trust your financial advisor and make the decisions together as a team.
Interested in learning more about real estate investing and getting tips for your real estate investing business? Keep reading on Mashvisor! You will find accessible information on the hottest real estate topics.