This is Tanya with Envy Property Management. We all know that owning investment properties can come with some risk. There’s always a chance an investment property owner could fail. Sometimes, it’s not the investor’s fault at all, it’s simply a condition of market trends or the industry in general. However, many investors who can’t succeed in this industry wind up getting frustrated and out of real estate altogether. We want to prevent that from happening to you and one way to start is by hiring a Northern Utah property management company to assist you.
In Northern Utah, there are a few very precise reasons that investors fail and today I’m going to discuss the top 3 reasons property owners fail in real estate investing.
#1 – Northern Utah Real Estate Investors Try to Do Everything Alone
Utah is very well known for being a DIY state, a lot of Utahns believe they can do things on their own and save a few dollars in the process. However, if you don’t want to fail with your real estate investment, you need to operate it with a view of the future. This is true whether you’re investing in Northern Utah real estate, dabbling in the stock market, or starting a business. People will oftentimes read success stories about business people becoming profitable overnight. While this does happen every now and then, the real-life story is most Northern Utah investors get rich slowly and steadily over time. Be prepared to put in the work for months and most likely years.
Investors typically get very excited about buying their first investment property, and to save some money, they will attempt to self-manage that property without realizing how much knowledge and expertise is required and the time it takes to manage it effectively. It’s very easy to think that it doesn’t take much until you get that dreaded middle of the night phone call from your renters stating there’s a water leak in the basement and you have no one else to send but yourself.
But, this isn’t always true. Maybe an investor will have a bad experience with their tenant or find out the Utah laws surrounding being a landlord is way more complicated than they originally thought. The laws in Utah are very complex and constantly changing leading the investors to believe that the time, energy, and frustration is far too much for their already busy lives. It’s easy to forget something or misunderstand something, and then you’ve made a mistake that has the potential to be very expensive and time-consuming.
Landlords in Northern Utah who are trying to do the maintenance on their rental properties themselves will find that it’s very easy to fail as well. Not only are they losing their evenings and their weekends, but they’re also probably not doing as good of a job as a professional licensed and insured vendor or contractor would do. They may not be responding as quickly to these maintenance requests as they would if they were working with a Northern Utah property management company, and this in return can likely upset the residents.
When rental property owners try to do everything on their own, they’ll usually get burned out within three to five years and ultimately decide that real estate investing just isn’t for them. They’ll decide to go ahead and sell their assets and stop dealing with the day-to-day irritants of self-managing their investments. But it doesn’t have to be this way, if they had simply worked with partners and property managers, they could have kept the property and earned a lot more money in the long run.
#2: Investors Don’t Run Their Rental Property Like a Business
Investors who fail often fail because they don’t run their properties like businesses. Anytime you want to start a business and you go to the bank, the bank will want to see a business plan. If you were to ask an investor if they had a business plan, most of them would say no. They know that their property is a business and they know there are laws and regulations and expenses, however, they are not putting it all together and understanding that they need an actual business plan in order to be successful.
A business plan is going to help you understand your strengths and weaknesses and will help you leverage the expertise of others. Don’t let your ego mislead you into thinking you have to do everything yourself just to save a few bucks. It’s not your job to install flooring or hang drywall.
When you have a Northern Utah property management company, you are not only leveraging their expertise but you are also leveraging their staff. You have access to not only maintenance personnel, but qualified people to lease and manage the property efficiently. Most savvy investors don’t buy real estate to have a second or third job.
#3: The Rules Don’t Exist for Real Estate Investors
There is not a step-by-step playbook that tells you how to run your rental property, so, it’s a huge mistake to try to do everything on your own. There’s actually a very structured and standardized way of doing most things in this business. There are procedures and practices that have been perfected time and time again over the years. Your professional Northern Utah property managers will know how to handle every situation that’s thrown their way. They’ll operate your investment within policies and procedures and effectively run your property like the business it is.
There are a lot of laws and regulations in place here in Northern Utah, and some of those are favorable to your residents. That’s going to make things a bit more complicated in this business. You never want to be the landlord that gets in legal trouble just because you didn’t fully understand the laws.
Don’t let yourself fail as a real estate investor in Northern Utah. It’s very easy to succeed in this industry when you think of where your investment is going for the long term, surround yourselves with experts, and remember to run your property like a business.
Thanks for watching today’s video on why Northern Utah real estate investors fail. To learn how to succeed with your Northern Utah investment property, contact us today at 801-337-4337 or visit our website at envypm.com where you can see more valuable information on how to effectively run your investment property business.