In addition to finding, fixing, and selling properties you are responsible for protecting your entire portfolio as a real estate investor. If you are anything like most Des Moines real estate investors, you are always on the hunt for new strategies to protect every one of your properties. Your ability to prevent or protect yourself from avoidable disasters will directly result in the level of success that you achieve. Here are six important methods to adopt in order to protect your Des Moines real estate portfolio.
1. Get Educated, Stay Educated
Your first line of defense as a real estate investor is education. It is imperative that you keep yourself in-the-know about the conditions of the real estate market, laws, tax implications, marketing, and every other component of operating your business. Obviously getting and staying educated on so many aspects of your business can be time-consuming. However, utilizing tools like audiobooks or podcasts will allow you to multitask and reduce the learning curve.
2. Align Yourself With The Right People
No matter how hard you work at staying educated as a real estate investor, it is very common to develop some level of tunnel vision. With this in mind, it is important that you assemble a list of trusted experts that you can rely on to provide you with valuable perspectives on how to better protect your investments. Here are a few of the people that you should have in your arsenal:
A Realtor that specializes in Des Moines investment properties
Potential business partners
Vendors like handymen, plumbers, and electricians
Accountants or CPA’s
Real estate attorneys
3. Operate Like A Real Business
If you treat your real estate investment portfolio like a fun hobby or side project, it will never reach its full potential. You need to look at this like a real business and carry out your daily operations as such. Imagine that you are the CEO of the business and have a board to answer to at the end of each quarter. This will help you to maintain a higher level of accountability and motivation.
4. Plan Ahead
Anyone can start a real estate investment business but not everyone can be successful. Success requires a great deal of planning and forethought. You need to make annual business plans a part of your top priorities to stay focused on your goals and the tasks needed to achieve them. However, your planning shouldn’t stop there. You also need to plan for the many unexpected curveballs that will hit along the way so that they don’t have as much of an impact. Always keep a running savings account and have your properties insured to protect yourself from the repairs and issues that you can’t predict or prevent.
5. Diversify, Diversify, Diversify
Any investor worth their salt will tell you that diversifying your portfolio is one of the best possible defenses out there. This means incorporating a variety of different properties into your portfolio so that when one market is down, you can supplement your income with the ones that are up. The more diversification that you have, the less extreme highs and lows will feel and the better you will be at scaling up when the time is right.
6. Establish A Land Trust
One of the more complex but legally powerful ways that you can provide portfolio security is to set up a land trust to hold all of your properties. This will protect you in case you encounter lawsuits and various other liabilities. It also creates a desirable distinction between you and the business as separate entities.
Want More Tips To Grow & Protect Your Des Moines Real Estate Portfolio?
Having a strong defense is just as important as having a strong offense in the real estate world. Sometimes it can be hard to identify where your weaknesses are. Please give us a call today so that we can sit down with you to analyze the strengths of your investment strategy and identify any areas where you could use more protection.
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Liz and Chase