They say there’s no secret to success in life or in Real Estate. But they're wrong. There are plenty of secrets. The problem is once you dig in they really aren’t as secretive as you might suspect. These mystical secrets aren’t so much secrets, as simple strategies or repeatable processes all mixed in with hard work, some planning and a dash of long term goals that ultimately lead someone to success if they stick with it long enough.
I’m going to share one of what I call, The 7 Secrets of Successful Rental Properties right here. Plus I’ll give you access to the other six if you hang around until the end of the article!
Why do people fail in real estate?
Where the majority of people fail is the reluctance to put in that hard work, to take the time to plan and to put goals in place. The problem is these take work and dedication and that tends to scare folks away.
Another part of the problem (at least in my opinion) lies in our society falling prey to the belief that success doesn’t require hard work. People believe that there’s a magic bullet, a trick only known to the wealthy or a secret methodology that’s takes you from mediocrity to riches.
"Another part of the problem (at least in my opinion) lies in our society falling prey to the belief that success doesn’t require hard work."
We get bombarded in our emails, in our social media feeds and even late night TV with “opportunities”, “shortcuts”, “secrets” and more that can make us rich. Surprise these opportunities and shortcuts don’t really exist. At least without putting in some accompanying hard work!
If your plan for success involves learning that one secret, you’re setting yourself up for failure, rather than success, and if you’re hoping that’s what you’ll find in this article, you will be disappointed.
The Repeatable Strategy of Using
Systems & Processes
A key part of the success of any growing business to is ensure they have repeatable systems and processes in place and a great example of this is McDonald’s. Whether you love them or hate them, much of their success is based on their consistency of their systems. If you’ve ever eaten at more than one McDonald’s you notice the food tastes almost exactly the same whether it’s in Rome, Chicago or Los Angeles.
I know, I’ve eaten McDonalds in all three places! (I know, who eats McDonalds in Rome? Well, tourists who didn’t realize EVERYTHING but McDonalds closes in Rome for afternoon siesta that’s who!!) It’s because they have systems in place for everything from building the Big Mac to the colors of the packaging to the cash register systems that they can maintain this consistency.
It’s this extensive use of systems that you see in fast food places, stores and many other businesses that also allow them to grow consistently and to push out best practices that work across the company.
These same ideas apply to your Real Estate investing. That’s why I teach landlords and investors to understand and use systems with their investing. The more you can utilize systems and processes the smoother it becomes to run your business while at the same time making it easier on yourself as well.
How to create a repeatable strategy
A prime example of this is the creation of a system for filling any vacant rental units. Here’s why. With any luck you get to keep your tenants for one, two or maybe three or more years and if you only have one or two properties maybe you only go through the task of renting out a suite once every 24 to 36 months. The problem being, trying to remember what you did to fill it 24 months or more ago and what you did while it was vacant.
This brings up questions like Where did you advertise, what did your ad say, what questions did you ask potential tenants to screen them and most importantly how did I use Naborly to make much of this easier.
While it was vacant, if you couldn’t fill it right away, did you need to switch utilities to your name and if so, which provider did you use? Did you have to advise your insurance company, did you need to set up lawn maintenance and much more.
Could you imagine how much easier this would have been if you created a system, a list of processes or some sort of reference guide for yourself? If that sounds helpful, think about creating an entire handbook of systems for your entire rental investing business and how it could benefit you.
You could create processes for:
- Analyzing properties
- Screening tenants
- Repair and maintenance procedures
- Periodic inspections
The analyzing helps you as you expand and want to replicate your previous successes. The screening and repair/maintenance procedures could be handy if you wanted to have some one look after your property while you’re on vacation or if you hire an employee.
As for periodic inspections, you can set up timelines for inspections and can also include reference information for your property. These could include furnace filter sizes and unique bulbs types for specific properties along with a property inspection checklist. Or if you decide to hire a property manager who you want to do things YOUR way, you’d have a step by step guide at the ready.
Yes, it’s more work initially, but the long term benefits definitely pay for themselves. Most importantly though you’re in this for the long run, shouldn’t you be doing this right from the start?
If you haven’t already started to create systems, you need to make this a priority and the easiest way to do this is start by listing the steps of the next task you have to do in your business in a notebook. Repeat this process for each new task, whether it’s interviewing tenants, applying for a mortgage or even creating a checklist for doing your monthly bank deposits.
Once you’ve created several of these lists, start turning it onto a Word document and then ultimately create your Company Systems Handbook that you can refer back to whenever you need it. It’s not easy, but then again neither is success, and if success is your goal, then it’s well worth the investment of your time to get on this.
One Piece of the Puzzle
So there’s one piece of the puzzle when it comes to success with your rental properties.
Was it helpful? Would you like to find out about the other six? If you’ve answered yes, you’re in luck. What I’ve done is put all 7 Secrets/Strategies in an easy to read guide that you can read through and start implementing portions of immediately.
Some might require some extra work (which disappoints those who just want shortcuts), but that work will come back multiple times over in rewards. So who’s ready to start some extra work?
About the Partner:
Bill Biko of "The Educated Landlord" has been an active landlord for over a decade and has packed more enough experience in for a couple dozen landlords. Bill has had around 1,500 tenants which provided him experience in systems and evictions. Find out more about Bill on www.TheEducatedLandlord.com.