Scaling your real estate investments means taking steps to build a foundation on which future growth can develop. After all, even if there were enough hours in the day, you certainly don’t want to invest more time in helping your real estate investment portfolio grow. Rather, you want to take steps to encourage your investments to grow naturally by working smarter rather than harder. To that end, here are five simple steps you can take to scale your real estate investments.
Step #1: Select a Niche
There are many areas in real estate upon which you can focus, but you will get the most bang for your buck by focusing on one area and becoming exceptionally good at it. For example, you may focus on real estate in working to middle-class areas rather than also expanding your portfolio to include property in the low-income or luxury housing markets. This will allow you to master how to best generate revenue from your investments.
Step #2: Begin Networking
Networking with other experts in the field will help you gain the knowledge you need to be a success. Networking includes getting to know contractors, lenders, banks, sellers, vendors and others who will be critical to the purchase and development of your real estate. Simply discussing your ideas and having someone to bounce around ideas with you will help you to generate more success.
Step #3: Learn to Delegate
Even if you are able to perform a certain task very, very well, it may still be in the best interest of your time to delegate the task to someone else. In this way, your time can be freed up to complete more important tasks that must be completed with your personal touch. Keep in mind, however, that this does not necessarily mean that you need to hire employees. Rather, you may be able to delegate certain tasks to contractors, vendors, accountants, property managers and other independent professionals.
Step #4: Create Key Performance Indicators
Of course, when hiring individuals to complete certain tasks for you, you want to be sure they are providing enough value to be worth the expense. To help determine whether or not these workers are worth the cost, you should develop Key Performance Indicators against which they are measured. Examples of indicators you may want to monitor for various specialists include:
- Leasing Agent: The number of applications per showing or the number of leases obtained per showing.
- Property Manager: The percentage of tenants that are actually paying, the occupancy percentage or the number of new leases versus the number of move-outs.
- Maintenance Tech: The call back percentage, the number of work orders completed each day or the number of complaints.
- Construction Manager: The estimated time of completion versus the actual time of completion or the budget versus actual expense.
Monitoring factors such as these will also be helpful in determining whether or not your investments are on the right track for reaching your goals.
Step #5: Develop a Standard Plan
Once you have determined a plan that works for you with your investments, you can develop a standard plan that you can apply to future investments. This will help to ensure you continue to see the growth in your investments that you desire!