BiggerPockets Daily

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The goal of real estate accounting—or “doing the books”—is an accurate record of all the money going in and out of your business. Bookkeeping is a vital task for your real estate business, and there are several benefits to staying organized, such as freedom, legality, and profitability. When you know exactly how your business is doing at any given time, you are able to make better decisions and sleep soundly at night.You don’t need to be a professional accountant to keep accurate records. Just make sure to begin bookkeeping early before your business gets too big. Your future self will thank you. (Read more at https://www.biggerpockets.com/blog/organize-real-estate-bookkeeping) Learn more about your ad choices. Visit megaphone.fm/adchoices

An audit is anyone’s nightmare, but audits involving real estate can be especially complex due to all the moving parts. If you are a real estate investor—especially if you have invested in multiple properties—you would be wise to implement business practices from the get-go that make your finances easy to understand and comply with your state regulations. Managing your business well and being prepared will ensure you are audit-ready at any time.Generally speaking, an audit is a review of a business’s documentation and records to ensure that all actions and practices comply with state regulations. Based on your licensing and business structure, you may be subject to a variety of audits including a Broker Audit, Department of Real Estate Audit, or a Housing Audit. (Read more at https://www.biggerpockets.com/blog/real-estate-audit) Learn more about your ad choices. Visit megaphone.fm/adchoices

You have the power to become as successful as you want in real estate sales. Nobody can stand in your way except you, thanks to the influence of self-limiting beliefs. We all have them: pessimism, fear, complacency. Those are the things that contribute to a weak mindset and keep you from realizing your full potential. Attributes such as motivation, focus, confidence, and momentum, on the other hand, contribute to a strong mindset. And when it comes to being successful, nothing matters more than having a strong mindset. (Read more at https://www.biggerpockets.com/blog/sold-david-greene-chapter-8) Learn more about your ad choices. Visit megaphone.fm/adchoices

Regularly raising the rent keeps your properties in line with market rate. But you can’t just issue a rent increase willy-nilly—the first step is finding out if it’s even possible. When a tenant is in a lease, the rent is fixed for the term of that lease and cannot be raised until after the lease is over. This is why rent raises are most common upon the renewing of one’s lease.Before we dive into the rent-increase details, a quick caveat on compassion: With the economy struggling and the pandemic still devastating Americans, it’s important to consider your tenants’ circumstances. That doesn’t mean you can’t raise rents—but keep compassion in mind as we recover from COVID-19.However, month-to-month rental agreements typically allow you to raise the rent at any point, as long as you give enough notice. Usually, that means 30 days—but sometimes 60 days’ notice is required. Check your local landlord-tenant laws. (Read more at https://www.biggerpockets.com/blog/rent-increase) Learn more about your ad choices. Visit megaphone.fm/adchoices

When we ask for advice on a new idea, we are often looking for someone with experience to validate our ideas. That can be especially true when it comes to residential and investment properties.As a beginner real estate investor looking to purchase residential properties, you will more than likely come to a point where you start seeing single-family houses in a very low price range, and find yourself tempted—or maybe even a little concerned.Though people might warn against certain neighborhoods, you should be skeptical about these assumptions without ever visiting a property or checking out the neighborhood characteristics. Sometimes, a neighborhood deemed, falsely, “bad” might actually be a great fit for your portfolio.(Read more at https://www.biggerpockets.com/blog/neighborhood-analysis) Learn more about your ad choices. Visit megaphone.fm/adchoices

Taxes. While we don’t have a choice in paying taxes, we can legally shelter some of that income from escaping our pockets. One way includes the self-directed IRA.An IRA is an individual retirement account. If you work a job with benefits, your employer may sponsor an IRA. It was developed as a tool to help people save for retirement and many income tax incentives are offered as encouragement to save.You do not, however, have to be employed in a full-time job or work for a big company to enjoy the benefits of an IRA. Self-employed real estate investors can also get in on the tax benefits of having an IRA. Every individual or small business owner has access to what are called self-directed IRAs. And these self-directed IRAs can be a great wealth building tool.How?By controlling what the IRA invests in. (Read more...)https://www.biggerpockets.com/blog/self-directed-ira Learn more about your ad choices. Visit megaphone.fm/adchoices

In finance, portfolio diversification is the way to grow and protect your assets. Though diversification is typically understood as holding different types of investments or employing different investment strategies, it is still more than possible to diversify a portfolio with only one kind of asset (like single-family rental properties).Every investor knows the importance of diversification. It goes back to the adage, “Don’t put all your eggs in one basket.”For buy-and-hold real estate investors, diversification may seem like more of a challenge. After all, you’re employing one specific strategy to achieve your goals. In many cases, you also focus on one particular type of property. Where is diversity to be found?Believe it or not, you can effectively diversify your portfolio while specializing in one type of strategy or asset. (Read more...)https://www.biggerpockets.com/blog/buy-and-hold-diversification Learn more about your ad choices. Visit megaphone.fm/adchoices

If you have a no-pet policy, you probably won’t be surprised to learn that doesn’t apply to service dogs—but you might be shocked when realizing that emotional support animal laws supersede your policy, too.That’s because an emotional support animal is not considered a pet. Like a service dog, it is an assistive device to help with a disability, similar to the way a wheelchair provides assistance. Since a service animal is not a pet, a housing provider cannot charge a pet deposit or additional pet rent.(What’s the legal basis? Look to the Fair Housing Act, or FHA, which was adopted in 1968. Later, in 1988, lawmakers modified federal law to prevent discrimination against families or people with disabilities.)You may, however, refuse an animal that poses a direct threat to the health or safety of others, but you must be able to prove that the specific animal is a threat—general assumptions based on breed or size are not allowed. (read more...)https://www.biggerpockets.com/blog/landlords-emotional-support-animals Learn more about your ad choices. Visit megaphone.fm/adchoices

New real estate investors often get infatuated with the idea of the passive cash flow that real estate can bring in. So it’s not surprising when you see many new investors throw caution to the wind to chase cash flow and end up buying super cheap homes (in oftentimes questionable areas) thinking they will reach their investing goals faster.But this can be a big trap if you aren’t careful.(Read more at https://www.biggerpockets.com/blog/why-not-buy-cheap) Learn more about your ad choices. Visit megaphone.fm/adchoices