Many real estate investors choose to invest in buy and hold rental properties as a home based business, in tandem with their full-time job.
If you are wondering whether it is possible to do both and make money in real estate, be rest assured that it is very doable and highly recommended in fact. We don’t advise you to quit your full time job just yet. Real estate investing is a lucrative business with many long-term financial rewards, but one thing is certain, you will not become a millionaire overnight. In due time and after much due diligence, you can live a comfortable life and secure for retirement with real estate investments. Right now, your aim should be to start out small and formulate your long-term business plan. It is easier said than done, so be prepared to put in lots of time and effort to kick start real estate investing as a home based business.
What does real estate investing look like as a home based business?
1. Have a business plan
For any business, having a clear vision of what you want to achieve in addition to setting realistic (short-term and long-term) goals is unequivocal. You cannot run a successful business if you do not know what you want in the short and long while. Investing in real estate as a home based business is no exception, for smart investing starts with smart planning and due diligence. The right steps to starting your business include setting your goals and expectations, and having the necessary resources to implement your goals.
In brief, these are the main components of a good real estate investing business plan:
- Stating your business vision
- Highlighting your short- and long-term goals
- Identifying your opportunities and challenges
- Having a marketing strategy to sell and/or buy real estate
- Obtaining the necessary financial means
2. It takes dedication
Once you formulate your business plan, what follows is time and dedication allotted to achieve your goals and implement your real estate strategy. After creating a clear course of action to success, you have to power through to achieve success. Investing in real estate as a home based business will require you to grasp key real estate concepts, read up on real estate blogs, stay up to date with housing market news, build your real estate network, and consult with real estate professionals for advice and expertise. As the adage goes: ‘If you want something you have never had, you must be willing to do something you have never done before’. The more knowledge and experience you acquire, the better equipped you become to make more informed investment decisions regarding your business. Ultimately, you are in full control and autonomy to create your roadmap to success in real estate.
3. Be pragmatic
This one cannot be stressed enough: being too eager to kick start your real estate investing business will impede your success in the longer term. Set clear and achievable goals along the way to keep you in check. Our advice to you: be realistic and start out small. There is no cap on what you can do and achieve in real estate, you just need the right planning and implementation to get to where you want to be. Real estate investing as a home based business is a sound investment because of the financial repercussions and financial security real estate investors obtain in the long run.
4. Maximize your time to maximize your income
To run a home based business, real estate investors must learn to time manage and allot sufficient hours to take care of their business. Make a mental note that real estate is not about how many hours you put into it but about how smartly you allocate your time to achieve your goals faster and in the most cost-effective way possible. For example, to maximize your rental income, you must fulfill your duties as a landlord and manage not only your property but also your relationship with your tenants. A happy tenant pays the bills, an unhappy one burns a hole in your pocket. However, keep in mind that managing several rental properties at once will become a challenge and might require extra hands to keep operations running smoothly.
5. Running a business with key stakeholders
In line with the previous point, a home based business in real estate investing will require a team to keep operations running. Hiring a professional property manager might be a good idea if you have several rental properties under your wing. A professional property manager will be responsible for the upkeep of the property, hiring contractors, finding and screening tenants, collecting rent, dealing with tenant demands, handling complaints and eviction notices, and hiring other employees if deemed necessary.
6. Taking on an active role
Active real estate investors have a greater role when it comes to investing and managing more rental properties. Investors running a home based business must be active and proactive in running and growing their real estate business: finding opportunities to diversify your real estate investment portfolio, mitigating the risk of vacancy and market crashes, buying and selling real estate at the right time, in the right location, for the right price. There is no such thing as passive work to earn ‘passive’ income in real estate. At the end of the day, you reap what you sow.
All in all, having a full-time job to coincide with real estate investing is the ideal strategy, especially for novice investors. As a home based business strategy, have a clear vision with achievable goals to get your real estate investing business off the ground quickly and turn it into a profitable business. In due time, real estate can earn you a stable source of rental income and give you the financial freedom to grow and buy more rental properties. With the right perseverance, time, and effort invested, you too can become successful and diversify your real estate investment portfolio for greater returns.
Head over to Mashvisor now to kick start your real estate business in the right direction!