Investing in real estate can be an exciting premise — it’s been well-known that with the right decisions, real estate can provide a very good ROI (return on investment). But there is a lot more that goes into it than meets the eye. Divya Tandon is an expert in real estate management and investing, and she gave Ramon the rundown on how to get into this field of work and be successful. She started with a two-family house in Queens, NY, and from there grew her business into a full-time company that manages and owns properties throughout New York.
Divya’s company is a real estate management and investment firm. They mostly work with commercial and multi-family as well as the workforce housing sector. The workforce housing sector specifically caters to people who are working on building their credit or might be living paycheck to paycheck and are trying to save for a home. “I love doing what I do now,” is how Divya describes her job. Managing and owning property is much more than just static buildings — it’s about dealing with people too, and the right balance between making it a home for them and also creating profit for your company.
Metrics of Success
Divya’s business model is about making money on the “buying” or management side. She also has to consider how many units are occupied and how many people are paying rent in those units, because unfortunately it’s not always the same. She said it’s kind of a numbers game, just like in other businesses. If many units are occupied but the renters are not paying each month on time, then this can create a loss of income for Divya right out of the gate. If the units are empty, she can find good renters, but that takes time and work.
Real Estate Advice
Divya has some great advice for those who are looking to get into real estate either as a side business or move into it as a full career. There are many sides to real estate, and Divya’s expertise is in investment and management of properties.
Her first piece of advice is not to buy a fixer-upper right away. She suggests getting a taste of working in real estate first, before you need to put time, energy, and money into a property. She said that if you really want to make a purchase, try buying a condo. Condos are usually allowed to be rented out (always check with the homeowners association first) and instead of having to maintain the property on the outside, you only have to worry about the inside.
She also suggests investing through an investment firm. This way, someone is managing the paperwork and all the nitty-gritty details. Plus, you can invest a much smaller amount of money and you’ll get a payout each quarter. This is a great way to get your feet wet and learn the in’s and out’s without too much risk.
Divya has made some mistakes, and while it was all a good learning experience, there are definitely a few things she wouldn’t do again. She told us that she one purchased 16 two-family homes sight unseen from the city of Buffalo, NY. After seeing them, she realized that she could have gotten a better deal had she purchased them in a normal sale. She said it worked out fine, but ended up being a lot more work than she initially had planned. Divya also recommended having a thorough screening process for tenants, as she has had to learn over time to take a deeper dive into a prospective renter before accepting them. She also charges for pets now, which is something she didn’t do previously. She said she charges a small monthly fee because it’s very common practice and shows she is serious about the condition the apartment is expected to be in.
You also have to remember that real estate is a people business, too. Customer service is important because your tenants will come to you with any issues that arise, so knowing how to solve those issues in a friendly and service-oriented way is important.