Every property requires proper care and management. However, your property business differs in many aspects from your actual home. There are things that can apply to one, but not necessarily to the other.
Knowing these boundaries will help you in making wise decisions as an investor. Here are some pointers I can share:
A healthy property business should sustain itself financially
A property will inevitably incur some form of expenditure, whether it is for maintenance, taxes, labor, and so on. As much as possible, the business should be able to cover all these from its own income. If you are paying these expenses using your personal funds, then it is likely that the property is not in a healthy state.
In the beginning, it is normal for the business to need external funding. Consider this as a capital expense. However, at some point, it should sustain itself by paying for its own operational expenses.
Read my previous article, ‘How To Invest In Property With Less Than 1000 Pounds’.
Be open to entertaining potential buyers
One of the potential dangers of not setting boundaries is that you might get too personally attached to your property. Of course, it is good to value your investment. However, you should be able to make unbiased decisions when the time is right.
Keep in mind that you get your biggest return on investment once you resell the property after it appreciates in value. This can take time to happen, but when it does, you have to be ready for any selling opportunity.
Set ground rules when hosting family and friends
It never hurts to be hospitable to your loved ones. However, even your dearest relatives should understand that business is business and that the ‘family and friends discount’ doesn’t always apply.
For instance, if you run a vacation rental, you can consider accommodating friends and family during non-peak seasons or in between bookings. You should also set a limit on how frequently you will allow it.
Updates to the property have to align with your marketing
Rearranging your furniture, repainting your walls, or replacing your sofa set? Feel free to do it anytime at your home.
For your business, however, you have to remember that any changes must be in sync with your published content. You may have to do a new property photoshoot and to re-write your descriptions online.
Do not forget the admin duties
Like any business, the property also entails legal and administrative responsibilities. It is not just about the tangible aspects, but you have to expect a decent amount of paper works too. This can include getting business permits, filing taxes, securing insurance, accounting, payroll, inventory, and more.
Hiring a property manager or an agency can save you from having to take on this job. However, you have to make sure that the business can pay for the manpower cost.
Was this article helpful?
If you want to learn more tips and insights about property investment, then check my book, ”Bricks, Mortar and Other People’s Money: Learn how to create your own property portfolio by raising joint venture finance”.
