Profiting From Real Estate Investments An Investor Newsletter From HomeVestors Of America, Inc. By Marcie Geffner / Vol. 1 No. 22 11/30/2006 Your Investment Plan For 2007 December is a month for planning at many major corporations and small businesses. As the calendar turns into the new year, objectives are established, goals are set, budgets are formulated, and action plans are created and set in motion. Since ownership of investment property is also a business, the same sorts of activities are appropriate for propertyies owners at this time of year just as they are for company executives. Planning requires an ability and willingness first to scan the environment in search of new opportunities and then to position resources to take advantage of those opportunities that are most attractive for the business. It takes both thought and time to plan well. Here are seven suggestions: Make Commitments. A written plan complete with measurable goals and a detailed budget is far superior to a plan that's really just a bunch of ideas. The preparation of a written plan takes focus and concentration, which help to transform vague ideas into a concrete plan of action. Moreover, a written plan can be a reference throughout the entire year, not just in January. Do your homework, then commit your plan to paper. Boost Revenue. Investment property owners earn revenue primarily in the form of rents. Consequently, a good plan should consider opportunities to increase that stream of revenue. Could you buy more properties? Raise rents on all or some of the properties you already own? If so, when and by how much? Could you make improvements to the properties that would enable you to raise rents? Could you charge new or higher fees for rental applications, bad checks, pets and the like? What other changes could you make to bring in more revenue? Cut Expenses. The flip side of boosting revenue is cutting costs. Could you reduce turnover of desirable tenants? Spend less to advertise vacancies? Cut back on property operating expenses? Negotiate lower rates on maintenance contracts? Find a less pricy, but equally competent attorney or accountant? What else could you do to keep costs within your budget next year? Consult a Tax Expert. No one likes to earn a profit only to have it disappear at tax time. Ask your accountant about ways to manage and reduce your tax burden. Could you deduct additional expenses? Shift some costs forward at the end of the year? Take advantage of Sec. 1031 property exchanges to defer taxes into the future? Would a tax-advantaged retirement account fit your personal situation? Adopt Technology. The wrong technology can be a burdensome time sink. But the right technology can be a very good investment. Are the telephone numbers you need stored in your cell phone? Is your Internet access fast enough for your needs? Do you need a contact management program or accounting software? Is your computer protected against viruses? How can you make sure your investments in technology pay off in greater efficiencies? Manage Time. Like money, time is a crucial, yet limited resource for any business. That's why it's important to estimate, budget and measure the amount of time that's invested in the accomplishment of business objectives. How much time does it take for you to complete various tasks? Are there any tasks you could do less frequently or perhaps even not at all? Do you have good systems to plan and schedule your time? Should you outsource some of your activities or hire an assistant to help you? Embrace Change. Your plan should be written, but not cut into stone. Markets, resources, people, opportunities and priorities change. When change comes into your business life, welcome it and adapt your plan to meet it. Copyright 2006. Marcie Geffner. All rights reserved. No part of this article may be used or reproduced in any manner whatsoever without written permission of the author. COMING NEXT ISSUE: How to spot loan fraud. The Investor e-Newsletter is provided free by HomeVestors of America, Inc. Listen to the HomeVestors Real Estate Investors Hour each Sunday at 8 a.m. on WBAP Radio, click here to listen. HomeVestors of America HomeVestors has the knowledge to help investors find the right property for your level of experience. Sign up at www.homevestors.com to receive property listings in your area. Our local franchisees can help mentor you through the process! For franchise information, call 1-866-249-6932. If you have a question, comment, or an idea for our newsletter, please click here. <back | printable version