Investing in condos can be a very lucrative pursuit. Everyday I work with condo investors whose portfolios outperform stocks and hedge fund!
Deciding whether to invest in condos, or where to invest, is usually a matter of simple math – deduct maintenance costs, insurance costs, taxes, association fees and other foreseen expenses from the value of the property and the rent you’d charge.
However, there are certain condo investor habits everyone should develop to ensure amazing cash flow from their condo investments. And today, we are going to give you five of our favorite habits of successful investors.
1. Condo Investor Habits: Maintain And Upkeep The Property
When you properly inspect, maintain, and occasionally renovate your property, renter appeal increases. This ensures the value of your unit and the rent you can charge is always maximized.
All well-maintained property projects a sense of pride in your properties, and shows a lot about you as a conscientious landlord.
Clean windows every once and a while, install a new doorknob, make sure fire detectors work, fix defects in the wall, pay for a professional cleaning during tenant turnover, consider painting. This is all minor upkeep that is minimal cost, but will make sure your investment is as profitable as it can be.
Tenants will want to rent from you, which means less vacancy rates and you’ll enjoy a steady stream of income for longer periods of time.
2. Condo Investor Habits: Have A Niche And Brand
As an investor in condominium real estate, you are essentially running a business, and it’s no secret that all successful businesses have a niche they cater to and a brand they’ve developed.
Think of who and what you want your business to cater to. Who is your target renter? Write it down, their age, profession, lifestyle, income, etc. Develop a profile of who it is you want to market to. This is part of your business plan and will help keep you on track.
Also, know your strengths and weaknesses – if you’re very familiar with a particular location or type of property, that should be what you focus on. Know what you can’t do as well – like physical maintenance – and take steps to mitigate your weaknesses while advertising and playing to your strengths.
Not a handy person? Don’t waste 6 hours trying to fix a toilet! Build a team of qualified contractor to come in and fix it. After all, your time is worth something.
3. Condo Investor Habits: Be Proactive
There’s only so much time you can whittle away at a decision, trying to figure out if it’s a good one or not.
For condo investor habits, it’s important to develop proactivity. If a property comes up for sale that’s a good deal, jump on it, because someone else sure will if you don’t.
A renter told you they’re moving out in a month? Advertise now and start coming up with a plan on what needs to be done before a new renter takes over. Plan now!
That isn’t to say you should make rash, uninformed decisions. But, inactivity will only cause you to miss out on an opportunity and your investments will stagnate. Be aware of any risks or obstacles involved, and pull the trigger.
Sometimes you will fail or have losses, but taking calculated risks are paramount to success.
4. Condo Investor Habits: Keep Learning
As investors, we often forget about the best investment anyone can ever make. Investing in ourselves!
There are always new strategies, new locations, and new information to digest. Financial and real estate laws change, and it’s important to keep up to date with those for obvious reasons.
Be involved in the condominium’s association as much as possible, as nearly every condominium complex has one and they have control over what happens at the complex and how funds are saved, spent and invested.
Commit to attending a monthly real estate meetup, or reading a real estate book once a month to keep up your skills.
There are thousands of real estate courses that can be taken online as well. Yes, the cost money, but it’s an investment in yourself, which will pay off dividends in the future.
5. Condo Investor Habits: Good Tenant Screening
It’s okay to be choosy about who you rent to, minus any applicable discrimination laws, of course. But when it comes to condo investor habits, this is the most important.
Successful real estate investors have a few things in common, and good tenant screening practices are one of them. You need a process to find tenants who pay their rent on time, don’t get into legal trouble and generally don’t cause problems.
Taking the time to ensure you get quality tenants up front will prevent a myriad of problems down the road. Here are a few important points to consider:
- – Have a standard application form
- – Be prepared with questions for any prospective tenant
- – Check with professional references
- – Do some simple online research of the prospective tenant, you’ll be amazed at what kind of public information people put on the internet
- – Do a credit check – I like to ask tenants to submit one with their application
- – Make sure the tenant understands the terms
- – Give copies of condo by-laws to the tenant and make sure they know the key points
If you can develop these condo investor habits, you’ll be in a much better position to run a killer condo investment business. Know the risks, take some risks, have smart people and develop good habits, and your condo investments are sure to help you live a more financially flexible lifestyle.