Failing to Prepare is Preparing to Fail

Real estate is an ever changing investing strategy. The market fluctuations create times that are great for investments and other times where loss is a real possibility. There is risk involved with owning real estate and it is through this risk where great gains can be achieved. Before beginning the investment journey, a new investor must prepare for what is ahead. They need to set up different exit strategies to lessen their chances for failure. They need to not only set up a plan A but also plans B, C, and D. The more backup plans the better off an investor will be to succeed.

Exit Strategies

It is important for you as an investor to come up with different plans if your original plan does not play out like you thought it would. Say for example you buy a property and are unable to rent it as a long term rental at the required amount to cover your bills and still make a profit. Recognize that there are other options for you so that you can still succeed as a real estate investor.

One option would be for you to list your property as a STR. This will require some more work and money to furnish the place but will likely allow the property to cash flow. With more tenants coming in on a weekly basis, you will bring in much more money than you would with the traditional method. That being said, some investors simply do not want to do the necessary work required to run a successful STR. Some may not even be allowed to at all with their city regulations. For these people, it is crucial to not give up but to look for other options.

Another option would be to turn your property into a MTR. With MTRs, you will likely keep a working professional in your property for at least 3 months at a time. This means that you only have to look for 4 tenants throughout the year which is not nearly as many as you’d be dealing with in a STR. A MTR will provide more cash flow than a traditional long term investment but not as much as a STR. Hopefully, this option should be able to get you some positive cash flow that puts money into your bank account each month.

That being said, if these two options do not work, there is still yet another option that will keep you from losing money each month. This option is to go ahead and sell the property and move on. Why stay in pain day in day out when there is virtually no possibility of this deal working out. Know when to cut ties so you can stop the bleeding. Selling the deal even if it is at a slight loss is better than the months or even years of headaches, lost income, and the opportunity cost of owning a different rental that would generate revenue. Selling property is a necessary fact when investing that all of us will face at some point. There is no shame in this option at all. Keep moving forward!

Be as creative as possible when owning real estate. Ask yourself “How can this make money” instead of closing your brain off and completely giving up. Real estate has numerous other opportunities that I have not mentioned in this post for you to make money. Don’t get frustrated if one way does not work for you. Try another and keep going! Have a plan and keep making adjustments. You’ve got this!