For many people, managing a real estate business is a lot of fun and extremely lucrative. But, at the same time, it can also be a headache if you don’t get the administrative side of it right.
So, what can you do to turn the situation around? What headaches are out there, and what can you do about them?
Lack Of Cash Flow
One problem you’ll run into is the issue of unpredictable cash flow. When you run a real estate business, it can sometimes fluctuate wildly, and deals can fall through.
This problem is particularly acute for those just getting started. If you don’t have cash in the background somewhere, you can find yourself running out of money quickly, and the business as a whole risks going under.
The way to solve this problem is to just ensure you have cash already saved up. If you’re investing in properties, avoid the temptation to bump right up against what you can afford.
You can also use software to track your incoming cash flow and outgoing expenses. These solutions can warn you in advance if you are facing a cash crunch, and tell you what you need to do about it, if anything.
Intense Competition
As a real estate business, you’ll also likely face some intense competition along the way. This can be fearsome sometimes, so you need to be careful.
The problem with real estate is that it is quite an easy industry to get into. Virtually anyone with money for a deposit on a property can get involved.
Because of this, you’re always being commoditized, and prices are being pushed down. Yes, you can earn yields and properties will appreciate, but you can get stuck if you aren’t careful.
The trick is to find a niche or a growing area where you can earn larger profits for a while. These earnings will give you a cushion and allow you to brand yourself on social media as something different. You want to avoid coming across the same as everyone else.
Client Demands And Expectations
Client demands and expectations are another big one. People will often expect you to be available 24/7 and provide them with flawless service, even if being a landlord is your side gig.
The problem with these demands is that they are draining and they take up a lot of your time. Sometimes, you can wave goodbye to your evenings because there’s some issue at a property you own.
The key to resolving this problem is to set boundaries and use CRMs to manage people. Tell your tenants when you are available (usually during the day time), and when you want them to contact you.
You can also use property management software for small landlords to streamline the process. These tools allow you to keep on tip of issues and use portals for tenants instead of the phone.
Administrative Issues
You may also find that your real estate business snows you under with administrative issues. There just seems to be so much that you need to do.
The way you can deal with this is to outsource tasks to virtual assistants and get them to take care of it for you. These days, there are countless professionals in this field who can do this work for you, so you won’t end up paying through the nose. Furthermore, you can adjust service provision based on what you use, so there’s no issue with getting bogged down with payments either.
Most real estate businesses need someone for perhaps 10 to 15 hours per week. Virtual assistants love taking on projects like these because it gives them flexibility and allows them to work with several clients at once.
Market Volatility
Market volatility is another big issue that can derail your efforts. If prices keep changing, it can make it challenging to know where to invest.
Market volatility makes it harder to know where to invest in the long-term. Prices could be soaring in a particular area, but crashing in another, often based on news items.
If you want to deal with market volatility, accept that it exists and then look for opportunities. Try to figure out when prices are going to crash so you know when to get in on the action. You can use tracking software to keep tabs on prices and then research local areas to see whether you think they reflect fair market value. Sometimes, you will gain insights that prove that the market is undervaluing a particular property.
Work-Life Balance Struggles
Work-life balance can also become an issue when you manage properties. Constant client calls can prevent you from enjoying your personal time and space. What’s more, most of these calls come during the evenings and weekends when tenants aren’t at work.
Again, you can deal with these problems by using a property management company or fielding virtual assistants. They can arrange for repairs on properties or deal with client problems, like being unable to pay the rent.
If you want to offer your personal time, you can use systems like Calendly. These allow you to schedule and block off personal time.
Lead Generation Challenges
Finally, you might face lead generation challenges. These happen when you are struggling to locate people who could potentially rent out your properties and make use of them.
Most markets aren’t like this, but problems can occur if you’re in the wrong area.
One solution is to simply sell up and exit the market, taking your capital with you. You can also look for referrals or start networking if you think the location still has potential.
Referrals are also something you can pay for. They can be expensive, but they are also lucrative if you can find the right people.
So there you have it: some of the reasons why your real estate business might be giving you headaches, and what to do about it. The more information you can gather, the better off you’ll be overall. Once you deal with these issues, you can almost put your enterprise on autopilot.
