Turn a Profit: 5 Must-Know Tips for Managing Your Real Estate Investments

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Did you know you’re more likely to make more money in real estate than in the stock market?

That’s right! Since the turn of the new millennium, real estate has outperformed stocks 2 to 1, delivering 10.71 percent return on investment every year. On the other hand, the stock market returns 5.43 percent annually!

As a real estate investor, you have no doubt made a smart investment decision.

However, just because the industry promises more returns doesn’t necessarily mean your real estate investments will be profitable. You still have to exercise shrewd management and keep making smart decisions.

Keen to learn how you can get the most out of your real estate investments? Keep reading!

Set Up a Holding Company

It’s a moment of pride and satisfaction when you buy your first investment property. As such, it’s understandable that you want the title to be in your own name.

But this type of investing requires you to create a company and register properties in the company’s name. Here’s why:

Any physical property presents a certain level of risk. If someone’s injured on the property – say they tumble down the stairs and break a leg – nothing will stop them from suing the property’s owner for compensation.

When your properties are registered under a limited liability company, such lawsuits won’t get to you. You won’t be held personally liable, meaning your personal assets, like your home, will remain protected.

Work With a Property Management Firm

If your real estate investment portfolio boasts of at least a couple of rental properties, it’s advisable to designate them to a property management company.

We get it. Most investors avoid hiring a property management company because of the associated charges. Don’t be like them.

An experienced property manager will do more than collect rental fees from your tenants. They will market your properties, ensuring low occupancy rates. They will also handle tenant complaints and ensure the properties are clean and secure.

More importantly, as an investor, your focus should be on finding other investment opportunities. A property manager will free up your time because you’ll no longer have to regularly visit your rental properties.

Insure Your Physical Properties

It’s easy to overlook purchasing insurance, especially if you buy investment properties in cash. In this case, paying property insurance comes off as an unnecessary expense.

On the contrary, purchasing adequate insurance is an ideal way to protect your investment from risks such as fires and weather disasters. If the unfortunate happens and your property is destroyed in a storm, for instance, you won’t have to worry about incurring losses because your insurance company will compensate you accordingly.

Get the Most Out of Your Real Estate Investments

Investing in real estate is a sure way to build wealth and get rich. Unlike in the stock market where a crash can wipe out your investment, the real estate market is fairly secure and steady.

And with these tips to manage your real estate investments, you’re now in a better position to make the most out of it.

Keep browsing our blog for more reality tips and insights.

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