Investing in real estate is generally thought to be a solid strategy for building wealth and more or less passive income. The thing with real estate investing is that it tends to be more of a business venture than anything else. That means that it’s a good idea to create a business plan to help guide your endeavors.

Decide Your Investment Strategy

One of the most important things your business plan should do is to define your investment strategy. What segment of the real estate market do you intend to invest in? What are the characteristics of your ideal tenant? How do you intend to attract them? What locations do you want to focus on? What are your goals for your investments? All of these are questions you should answer as you define and focus your real estate investment strategy.

Choose Your Partners Wisely

Some people choose to invest in real estate on their own, while others choose to have partners. Choosing to invest with a partner can have significant ramifications for your investment ventures. For one thing, you’ll need to organize yourselves as a partnership. According to Freeman Lovell, partnership LLCs require filing an additional tax return. For another, potential partners come with their own sets of skills and goals. The more you have in common in terms of the goals you share, the more likely it is that you’ll be in alignment in terms of priorities and the decisions that need to be made.

Figure Out Your Financing

Real estate doesn’t come cheap, but that’s also part of what makes it possible to use it to make a profit. If you already have enough cash on hand to buy properties outright, you may not need financing. Otherwise, you’ll need to decide how you’re going to pay for the real estate you’re investing in. Mortgages are a pretty standard financing option, though you’ll probably need to put more down than you would for personal property. According to FortuneBuilders, investment properties can require anywhere from 15–25 percent for a down payment. Regardless of how you intend to pay for the property, your method for financing your investments should be clearly laid out in your business plan.


Having a solid plan laid out can go a long way towards helping you find success in real estate investing. Your business plan should define your investment strategy, help you structure your partnerships, and determine how you’ll finance your operations. There are plenty of other things you can include in your business plan too. Think of your business plan as a roadmap for your investments.

Read this next: How to Sell Your Home for More Than You Bought it For

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