When the weather warms up, it’s a good time to clean out the nooks and crannies and not just the ones in your closet. Every year, you should take a step back, evaluate your processes, take care of your business “housekeeping,” and set new goals.
You’ve just paid your taxes, so getting organized for next year is top-of-mind. If you want to take this opportunity to give your real estate business a refresh, we’ve prepared a checklist of items to address in your spring cleaning efforts, with tips from two real estate investment advisors.
10 Tips for Spring Cleaning Your Real Estate Business
Organize and digitize your files
If you want tax season to go smoothly next year, you can’t keep your business documents in a stack on your bedside table. Consider setting up a digital system to keep yourself organized. “I would definitely use a cloud-based bookkeeping software with automatic expense categorization,” says Riley Neilson, Strategic Real Estate Investment Advisor at Real Estate Bees. At the very least, digitize your records and receipts with a mobile app like Genius Scan and separate documents into folders where they’ll be easy to locate.
Declutter your office and email inbox
Neilson says to consider using powerful spam-blocking software like Edison to clean up your email inbox. And give your physical space a little TLC as well. Too much clutter can increase anxiety, reduce focused attention and productivity, and even negatively impact your health, research shows.
Schedule spring maintenance for your properties
“Schedule a maintenance check-up on your properties to address any repairs or issues that may have arisen over the winter. This can help keep your properties in good condition and minimize future repair costs,” says Armstead Jones, Strategic Real Estate Investment Advisor at HouseCashin. For example, you should:
- Inspects roofs, chimneys, foundations, and exteriors
- Inspect attics and basements
- Clean the gutters
- Clean and service A/C units and furnaces
- Reseal exterior woodwork
- Wash windows and clean weep holes
- Trim landscaping overgrowth and rake lawns
- Change the batteries in smoke and carbon monoxide detectors
- Seal any leaks and clean clogged drains
Reevaluate your business expenses
It’s a good time to think about your business expenses and see if there are ways you can cut costs. For example, you should:
- Get new landlord insurance quotes: It’s a good idea to collect a few new landlord insurance quotes annually since premiums can change, and new companies may emerge that offer better options
- Look at where you’re keeping your cash: Make sure to take advantage of today’s generous APY offers on high-yield savings accounts, so you can maintain a strong cash position while growing your money. Some online financial institutions are offering 4.00% APY or higher.
- Consider a new business credit card: It’s a good idea to evaluate new business credit cards every two years. See if you can earn a bonus or get better rewards or features than you’re getting with your current business credit card. If you’re working on remodeling, repairing, or furnishing a new property, take advantage of deferred interest offers on some business credit cards.
- Look for ways to trim your expenses: These can include working with your CPA on a new tax strategy, refinancing mortgages with high interest rates, appealing your assessments when property taxes increase, or increasing the energy efficiency of your properties.
Explore new revenue streams and maximize your income
Take another look at rental comps for your area and consider increasing rents on lease renewals. Or, consider whether you might change your income strategy for your current properties.
For example, if there are more digital nomads coming to your city than ever before, would it be advantageous to switch from a long-term to a medium-term strategy after your current tenants move out? Similarly, if you’re facing too much competition on Airbnb and high vacancy rates, might a long-term, furnished rental serve you better? If you added a kitchenette in a property with a separate basement entrance, could you rent it out as two units? Could you capitalize on the co-living trend and rent out each bedroom of a single-family home separately?
Look at diversified ways to invest your profits and use your skills to create new revenue streams as well. If you’re an experienced investor, can you take on consulting work or mentor others in the industry? Keep an eye out for possibilities.
Evaluate and check in with your business relationships
Consider whether the people you work with are living up to your expectations. Look at whether you need new property managers, maintenance people, or cleaning crews. If you’re not happy with your real estate agent, consider looking for a new, investor-friendly agent. And check in with the business relationships you intend to keep.
Neilson says you should meet with your CPA a couple of times per year. “They can control the trajectory of your business so you don’t have any surprises when tax season comes,” he says. You’ll also want to make sure your attorney and accountant are on the same page. He also recommends meeting with your board of advisors, even if you have an LLC. If you don’t have other decision-makers in your business, “it can put your assets at a pretty tremendous risk,” says Neilson.
Set goals for the year
Understand your strategy so you can set (and crush) your goals. Jones recommends setting “specific, measurable, achievable, relevant, and time-bound (SMART) goals for the year.” Then, break up your goals into more manageable chunks. “I try to break up my goals 90 days at a time,” says Neilson. “If you set smaller goals over shorter periods of time, that helps keep you motivated.”
Refresh your brand image and marketing tactics
“Review your marketing strategies and brand image to ensure they align with your current business goals and target audience,” says Jones. “Consider updating your website, social media, and marketing materials to reflect any changes.” In addition, update your blog content and optimize your website for search engines. And make sure your listings are still accurate and highlight the benefits of your properties. Neilson says it’s a good time to scrub your email list of inactive and temporary emails as well, which can reduce your marketing costs.
Research new opportunities
Jones recommends keeping an eye out for new investment opportunities in the market. “This could include attending industry conferences, networking with other professionals, and researching market trends and emerging neighborhoods.” You might also look into bootcamps and webinars to address gaps in knowledge that prevent you from maximizing your success. As you network with other professionals, keep track of your communications with Customer Relationship Management (CRM) software to help you stay organized and reduce your liabilities, Neilson suggests.
If you’re evaluating new markets, especially as an out-of-state investor, just bear in mind that selling activity ramps up in the spring, Neilson advises. Look at metrics over the past year when evaluating new opportunities rather than comparing a new spring market to your current winter market.
Refine your processes
Evaluate your current processes, and look for areas where you could improve your efficiency, with automation or digital tools, for example. If you want to free up more time for yourself to take on new opportunities (or just enjoy the warmer days), consider hiring help or outsourcing some of your current tasks. Jones also suggests using project management software. This can be especially helpful if you manage several properties and want to track lease agreements or delegate responsibilities to team members and keep everyone on the same page.
We’ve all seen what can happen to a physical space when you let things slide—those dusty piles of clutter can get in the way of productive work. The same thing can happen with your mindset, processes, and goals.
Whether you set New Year’s resolutions or wait until spring to deep clean your business practices, you should take some time each year to get organized, ensure your strategies align with your goals, eliminate unnecessary time and money costs, maintain your properties, and check in with other members of your team. Spring cleaning your real estate business now will allow you to enjoy uninhibited growth in the future.
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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.