2021 is coming to a close, which means it is time to get your business in order. When it comes to the end of the year and real estate, making sure you are set up correctly for tax purposes, goal setting and some good old-fashioned thanks should be some of your priorities. At the end of each year, I take stock of what we did, both good and bad, and think about what I want to happen the following year. I’m always looking to make improvements and mitigate my risk. You need to be nimble in the Real Estate business and stay in front of the crowd. When the music stops, you need to ensure you have a seat. Below find some items to be sure and include in your end-of-year housekeeping.
Market Analysis
The Real Estate investing market moves quickly. So I look at last year’s trends and see what direction I think we are headed in for the coming year. I don’t have a crystal ball, but I want to base my goals on what I see. For instance, 2021 was a fantastic year. Rates remained low, prices increased, and buyers seemed to move quickly to close. I don’t think these trends will continue for 2022. It looks like rates will rise. When that happens, in conjunction with the increase of inflation, properties may become unaffordable and therefore slow sales in some areas or at least the bidding wars on properties that were very common in the first half of 2021 and almost nonexistent in the second half of the year. It also seems like buyers aren’t moving as quickly to purchase properties as they did at the beginning of the year. I’m sure it’s some “Highest and Best’ fatigue. I don’t think the market will crash in 2022, but I plan to be cautious in the first quarter and see what happens. Most decisions we make as Real Estate investors have time horizons of at least 6 to 12 months, so keep your eyes open to what’s happening in your market.
Goal Setting
I always like to set some goals for the new year. If I improve the way I do business, concentrate on my expenses and asset turn while building my network, the year will be good, no matter what the market does. Make sure you keep your goals as specific as possible. Hard to see what progress you made if the goals are vague. I always focus on:
- Process Improvement
- Profitability
- Networking
Taxes
The most significant expense you will ever have in your life is taxes, period. I always take time to review things with my CPA to make sure I’m not missing anything and account for everything correctly. If I can save or delay paying taxes legally, I do. A good CPA and attorney are worth their weight in gold. Make sure you have these people on your team.
Say Thank You
We all get caught up in our busy schedules. We are often running from fire to fire. At the end of the year, I always take time to thank the people who helped me out this year. It can be a text, quick call, or a gift. We all like to be appreciated and acknowledged. So take a few minutes to thank the people who have helped you succeed and hopefully help you grow in the upcoming year.
At the end of the day, we are all pretty fortunate. We get to do what we love for a living. We get to work for ourselves, help others and see our accomplishments daily, both good and bad. So, enjoy your achievements from this year. Look at the things that didn’t work and learn from your mistakes. Decide on what you want to accomplish this new year and remember to treat people with respect.
I hope everyone reaches their goals in 2022. If you or one of your colleagues needs hard money financing in the upcoming year, contact me by clicking here or calling 248-385-3750.