Ignore this aspect of your real estate education, and your investment goals might slip right through your fingers:
Many new real estate investors make static business plans which, while consistent, fail to account for seasonal and larger cyclical trends. This is one of those factors that cannot be ignored. Familiarizing yourself with adaptable trends will serve as a valuable piece to your real estate education.
As the housing market continues to improve, more money is spread throughout the economy and contractors of all types will increase their rates. Some contractors may find themselves with too much work to undertake. The back log of work will serve to slow down delivery on their behalf.
For example; some firms had a two year waiting list for roofs at the end of the last boom in areas that were prone to hurricanes, blizzards and tornadoes.
Those that neglect their real estate education and aren’t prepared for this part of the housing cycle could find their investing plans quickly derailed. What happens to your figures if every rehab takes twice as long and costs 25% as much?
That doesn’t mean you can’t hit or exceed your goals. Many experts would say that we are just on the front end of the best time for flipping houses, as home prices are beginning to rise. Plus, thanks to many of the most distressed homes already being turned, much of the inventory coming available may require less substantial work.
However, investors do need to account for these factors in their planning in order to be successful and avoid being caught off guard.
While it may not be practical or possible to stock up on every possible tool or material you’ll require over the coming months, there are certainly strategies for counteracting these trends and driving down costs.
This can include negotiating discounts for volume work, offering bonuses for work completed ahead of schedule, and even hiring your own in-house contracting team. You can even partner with one in order to provide them more motivation and increase loyalty so that your work is made a priority.
