How Real Estate Businesses Waste Money...

Most real estate investors subscribe to the thought that you "must spend money to make money". This can be true, but you also must know exactly where that money is going and the results it brings. A real estate investor never has any money to waste.

Some ways that your investing business might waste money includes the following:

1. Manage your credit cards & lines of credit - If you have several cards, develop a computer program that will show you the exact balances, due dates, and the interest rate you are paying. Always be aware of other solicitations that save you money and possibly change your balances over to a new company.

If you have any employee cards, see if you can set a limit on them. If not with the credit card company, make sure that the employees know their limits. Manage your credit cards wisely and never, ever miss a due date.

2. Develop an annual plan so you know where you will spend money - This helps you in several ways. An must be aware of what portion of the profits are going to advertising, towards incentives, towards accounting and other internal expenses, etc.

3. Do not over-purchase any products or services for a business - If you buy rehabbing materials in bulk, the money is tied up and a place must be provided to keep the extras. That might be an unnecessary expense, as well as hurt cash flow.

4. Developing a marketing & advertising budget - Knowing just what resources to use is key to keeping money under control in an investing business. You must market and advertise, but you also must get value for your money or you will soon be out of business.

Keep a record of how much is spent, can you get payment terms, when is the most efficient time to advertise your particular business to get the most value for the dollar.

Every dollar must be accounted for in advertising because the lifeline of your business depends on new leads and customers. Advertising is the way to get the word out to the community or the Internet.

5. A real estate investor will sometimes be under self-induced stress to manage all aspects of the business - Sometimes, leaving the control and decisions to others that are qualified is the best way to manage the business. Releasing control may be hard to do sometimes, but in a lot of businesses, money can be wasted because the owner cannot possibly be as efficient as the person who has studied or is knowledgeable about a particular field.

For instance, if an investor does not know accounting, many mistakes in reporting income and taxes can be made. A qualified accountant can possibly save more than the cost of their services in reduced taxes.

Take a hard look around your real estate investing business and do not let anything be set in stone if saving money is the goal. Challenge everything that will cost money and see what can be done to change the situation.

Any money that is saved is money that can be put back into the business either in profits or in growth.

A real estate investor wants their business to be successful and will work hard to sustain growth. An investor wants a way to continue making and growing money from a product or service that is interesting to them.

After growing a successful investing business and being smart with cash flow, many business owners will sell their businesses only to start another business.

The reason is that real estate investors are independent types and challenges are rewarding when met and faced.

Saving money through every day operations will help the business owner to meet their financial and emotional goals.

Give us a call for a free initial business consultation.