The second strategy for surviving and even thriving in a slow real estate investor market is to run your investments like a business. There are several things to consider but this concept is based on a very important concept. That is how you have acquired your properties or what to consider if your are just getting started. Lets start by asking if you currently own property how you go them? Were you lucky? Were you a person who bought a few pre-constructions deals and made a bunch of money? But the most important question is do you actually know how you made money through this investment? 

The last question is really the crux of the issue. It is also how I am going to break down this strategy below.

Knowledge: If you are a real estate investor who has made money investing in the past do you actually know how you made the money? Or did you hire someone who told you about an investment that you put your money into and rode it out? See running your investments like a business means you need to know how the investment works. Why it works and how the money is actually made! In other words you need the knowledge that make it work. Not someone you hired. So step one is to make sure you have that knowledge.

Take Control: Building off step one is taking control. Be involved in the investment. Make the decisions. Don’t just hand money to someone to do it for you. Taking control is the only way you can actually run this business and not be run by it. 

Build Your Skills / Fundamentals: Understand that real estate in just a product. Basic business skills like sales, administration adding value are all critical to master. For example the real estate investing business comes with many tax benefits. You need to understand how these work to take advantage of them. Of coarse you want a good accountant but you need to understand the fundamental of the tax ramification so you can made decisions as needed. A great example is knowing the holding period of a property that changes the profits you make upon sale to being a capital gain versus ordinary income taxation. Don’t know the answer? You should. If could have a huge impact on your bottom line. Look it up as the who point of this article is for you to understand you need this knowledge!

Ask Why? – Be Creative: Having the fundamental knowledge above will let you ask why when your desired outcome is not happening. For example if your selling a home and no one is buying ask yourself why? If you have the skills I’ve mentioned above you will see the answer is not always to lower the price. Can you be creative and add value in another way. Can you change the terms for the potential buyer? Can you add a feature that buyers want and other homes don’t have? The key here is to stand out! 

Proper Accounting / Write Offs: This last point is really a fundamental skill but its so important I have separated it out so you don’t skip it! One of the greatest benefits to the real estate investment business is all the write offs you get. However, if you do not understand the tax laws and make sure you have the proper accounting for your investment business you will miss many of these benefits. So learn this aspect. No you don’t need to become a CPA but you need to know the laws so if your CPA is missing something you don’t miss out. Remember, most CPA’s just go off what they are told. If you fail to tell them something you obviously will miss out. Therefore you need to know!

I hope you have found this helpful. The truth is all long term successful real estate investors run these investments as a true business because it is. You need to do the same!

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