Investing in real estate is one thing, and managing it is different. Choosing to do property business is good, but monitor mistakes to avoid them in your real estate business. Real estate investment can help you retire early, but you must give it your best and manage it properly.
This blog explains the mistakes you should avoid while managing your property business investment. Most investors who avoid the errors in this blog have made millions of profits in their investments. In addition, most have become mega investors by avoiding simple mistakes.
Furthermore, we have another guidance on the mistakes you should avoid when buying your first investment property. You can read it if you are a first-time property buyer.
Keep reading to learn the mistakes to avoid in the real estate business in Kenya.
Top 5 Mistakes to Avoid in Real Estate Business
1. Poor financial management
Poor financial management is one of real estate investors' most common mistakes. Many new investors believe they can simply wing it regarding their finances, but this is a huge mistake. Don't let your first rental income deceive you into becoming a spendthrift. Remember, the houses will need some repairs someday, and it won't be simple without some savings somewhere.
With good financial management, your business is likely to succeed. Financial management includes creating and sticking to a budget, knowing your financial goals, and tracking your progress.
Without these critical components, you will likely be overspending, and soon you'll be in debt. If you're serious about making your real estate investing business successful, ensure to put financial management at the top of your priority list.
2. Not creating and following a strategic marketing plan
Don't assume that everyone knows about your new property and that they will come to rent or buy. Even if they know, you are not the only person in the property market. And the truth is there are better options than yours.
Therefore, what do you do? A strategic marketing plan will help you focus your efforts on the suitable activities to generate the most leads and ultimately help you close more deals. Without a solid marketing plan, you will likely waste time and money on activities that don't produce results.
3. Unwarranted buying
Three instances of unwarranted buying can occur in the real estate business. The first is purchasing property without doing your homework first. This scenario leads to overpaying for a property, or worse, buying a property that doesn't even meet your needs.
The second type of unwarranted buying is buying property without having the proper financing in place. This idea usually leads to financial problems down the road and difficulty selling the property if you need to.
The third type of unwarranted buying is buying property without having a clear exit strategy. This can lead to holding onto a property for too long or worse, being forced to sell at a significant loss.
4. Not Leveraging Technology
Change is inevitable, so the earlier you adapt, the better. Technology has been there for the last few decades, but it's always coming up with new strategies. Technology has put many out of business due to negligence to change. So, don't be among the investors who will be out of business due to technology again.
As a real estate investor, you should leverage technology to succeed. You should be on top, ensuring you implement every new technology that could affect your property business.
Big technology mistakes that could cost you
Not Having a Website
People expect you to have a website today. If you don't have one, they may not take you seriously. Your website doesn't have to be fancy, but it should be professional and easy to navigate.
Not Using Social Media
Social media is a great way to connect with potential clients and stay on top of people's minds. Ensure you are active on at least one platform, such as Twitter, Facebook, or Instagram. For instance, Facebook alone has over 1.9 billion daily users. That means you can reach many people in your area using Facebook and other platforms.
Not using technology to stay organised
Real estate-specific Customer Relationship Management (CRM) software programs can help you stay organised and on top of your business. Not utilising one of these tools can make it challenging to stay on top of your real estate leads and deals.
Not leveraging technology in your marketing
Marketing should be among your top goals to achieve in your real estate business. And if technology can help you do aggressive marketing, why shouldn't you try it? Technology has introduced thousands of marketing tools and resources. Ensure you leverage the tools by using them to create targeted marketing campaigns.
5. Not developing a strong brand for your property business
Building a strong brand is one of the most important things you can do for your real estate business. Establish your property business as your area's topmost seller and buyer.
If you don't build a reputable real estate brand, you'll be lost in a sea of thousands of investors. As a result, it will be complicated to stand out and be remembered.
Additionally, you'll miss opportunities if you don't have a strong brand. A strong personal brand can open doors to new opportunities, both in your business and in your personal life.
Without a brand, you'll have more difficulty building trust with your clients. Customers seem to trust established brands, and if yours is not established, you lose potential clients to more prominent brands.
The right clients are attracted to strong real estate brands. If you're not working on developing a strong brand, you'll struggle to attract the right clients for your business.
Conclusion
Building a successful real estate business should be your number one goal. Therefore, don't hesitate to avoid the aforementioned mistakes that can pull you behind in your journey.
Like we said earlier, we have another blog that explains mistakes you should avoid when buying your first property.
Frequently Asked Questions
What is the biggest mistake to avoid in the real estate business?
Poor management of everything, from finances to property, can drown your real estate business. Therefore, it is crucial to learn how to manage your business perfectly.
What are the main risks in the real estate business in Kenya?
Poor location in terms of growth and security is one thing that can stagnate your real estate business. As a result, you'll have high vacancies and negative cash flows.
What is the future of property business in Kenya?
The future is bright for the real estate sector due to the continuous population growth. In addition, as long as people move to towns in search of greener pastures, the demand for housing will never subside.
