3 Rental Real Estate "Secrets"

Chances are, if you have registered for a Webinar or a free white paper or some how made your way onto any number of different real estate lists, you get bombarded with email.  Some of them are good emails.  Some of them are not so good.  And sometimes, a little white lie is told when the person sending you the email says they have a real estate investing secret to share.  The truth is, there are no "secrets" in real estate.  Sound fundamentals, great relationships and thorough due diligence will always be the hallmarks of a good investment and a good investor.  However, there are always tips that investors can share with each other and every once in a while they just feel like secrets!

1. Be Prepared for Unexpected Costs

So many people give and receive the following advice:  establishing an emergency fund can make the difference in being hit hard by surprise expenses and taking them in stride. I am not even sure if this can be categorized as advice...this should be a given with every investor.  Having that reserve on hand can help you survive long vacancies in your rental properties and unexpected expenses not covered by insurance. If you're currently receiving monthly income from properties, consider taking a percentage of each property's rent each month to pool into your emergency fund. Again, that sentence seems like such a no-brainer.  Of course you should be setting cash flow payments aside every month, but what about the advice to not purchase real estate without having a fund to begin with?  I am not a big fan of investors purchasing properties and either using every last dime to get started or being in "need" of the cash flow to survive.  Understanding how to and then actually preparing for a time when you will not have an income from the property can reduce the headaches later.

2. Get With the Times

Real estate investors can no longer afford to be technologically illiterate. With the ubiquity of social media and the wealth of opportunities they present, it pays to educate yourself on the tech side of things. Learn how to use YouTube; you can post videos of property you're trying to rent. Learn how to market yourself on Facebook and Twitter. Become an early adopter. As new forms of social media arise, learn how to leverage it for your business before your competitors do.  On the other side of the equation, learn how to use technology to assit you as an investor.  I am not a fan of technology sites that make it look like they have the all the answers.  There are sites such as Zillow and others in many areas of the real estate niche, that give you values or numbers based on algorithms.  This information is useful, but not always accurate and should not be used as a defining number.  The only place you can get truly accurate information on values, renovation costs and even rents is from someone on the ground.  This type of data cannot be outsourced to internet sites.  They are not accurate.  They are only as good as their algorithm and the info. they plug in.

3. Create a Quality-of-Life Checklist

This is a great tip adapted from Bankrate.com. Check out more great advice from them in this article. Although the list is intended more for those selling their primary residences, it's applicable to investors as well. (And don't let the "2012" turn you off; much of the advice is still timely.)

This list accomplishes two things:

1) It can give you indicators of whether or not the property is likely to increase -- or at least maintain -- its value.

2) It forces you to look at the things that potential renters are going to be looking at.

Do you have any rental real estate secrets you would like to share?  Leave them in the comments!