Sometimes it can be a challenge to discern what is really going to bring your real estate investment career to the next level. What’s going to help you punch up and reach new heights for your passive income? Can you make it by way of renovations and ROI? Relying on tenant retention? Making things easier and more streamlined with the latest technology?
4 min read
4 min read
So you’re a buy and hold investor. You’re not looking for a complicated flipping disaster, and you certainly don’t want to spend a fortune getting it right before you can start making money on the property. There are plenty of outside factors that can help you know that a property is going to be good—you can look to:
- The neighborhood
- The local economy
- The competition
- The demographics
- The amenity proximity
Obviously, if a community and a city is doing well economically, it’s growing and thriving and seeing a rise in population, it’s likely you’re going to do well, too.
Those are the markets you’re going to want to be in. That’s the broad sense. But when you narrow it down and start looking at properties individually, what really makes that specific property good and another property not good for real estate investment?
What should you be looking for?
3 min read
In real estate investing, it’s tempting to think that more investment properties added to your portfolio will automatically mean more profits. The fact of the matter is, it’s likely that you’re overlooking opportunities to increase your profits in the investment properties you already have.
A two angled approach makes the most sense. Real estate investors should absolute look to maximize revenue on the properties that they have AND add to their portfolios at the same time!
Real estate investment isn’t about how much money investors have to throw around and how many properties they’re renting out. Smart investing comes not just in volume, but in diligent care and attention. It is true that there is safety in numbers, but there is also additional revenue by working with your portfolio and partners to create a smarter return.
Boosting Your Investment Property Profits
This list is going to seem, well, basic. But the basics are what make the best real estate investors a consistent return on their investment over time. At Memphis Invest and Premier Property Management, we have made the basics our specialty. These are three of the MAIN reasons our clients have successfully made money over the life of owning their portfolios. Returns can go up and down year to year, yet a consistent long-term portfolio is going to perform up to potential if investors can focus themselves or their team of providers on these three key areas.
The mostly costly time for any investment property is when it is uninhabited. Every month of vacancy costs you a significant percentage of yearly profits. The best thing you can do as a real estate investor is to minimize vacancy. When you have a tenant moving out, no matter what the circumstance, start advertising as soon as you are aware of the move. Don’t wait. The only case in which you may want give some breathing room between occupants is if you’re planning big renovations that a tenant cannot stay through.
Another element to minimizing vacancies is offering something unique. What does your property offer? Convenient location, up-to-date appliances? Step back and reconsider why a tenant would want to rent from you. If your property doesn’t have some standout characteristic in comparison to other rentals in the area, maybe you should look to competitive pricing. While you don’t need to shortchange yourself on the rental price, lowering it may help attract more potential tenants more quickly and help fill the vacancy.
The money that you lose on a lower rental rate is often a better deal than the money you’d lose on months of vacancy.
Over the years, when you have long-term tenants, prices can be strategically increased to account for area competition, demand and increasing costs. Researching nearby properties is important to know what is and isn’t reasonable for your property.
Avoiding turnover avoids vacancy. While there are factors out of your control when a tenant decides to move on, there are plenty of things you can do to improve tenant retention.
The responsiveness of your property manager and maintenance crew is integral to tenant happiness. Your staff should excel in customer support and be polite, timely and efficient. While you may lose tenants to a career in another city or to home ownership, you don’t want to lose them to another landlord in the same area.
Keep your prices reasonable and competitive as an incentive for your tenants to stay. Take good care of the property and the needs and concerns of your tenants. Building a good relationship with them will make loyal tenants that only leave when they have to — because they’ll never want to.
Make Smart Renovations
Apart from tenant-related issues, smart renovations can go a long way to increasing the profitability of your investment property. Renovations that tenants value means you can increase rental prices. The more you can offer, the more they’re willing to pay. Your renovations shouldn’t be ultimately worth it to you, but to your tenants.
What will make their lives more pleasant? A deck or outdoor shed? Better paint on the walls? New flooring? Instead of breaking the bank on a kitchen overhaul, prioritize renovations in a way that will help you make an immediate impact on profits. Look for projects that are historically known to boost ROI.
While there is only so much real estate investors can do to maximize their profits, taking an active and attentive role in the management of one’s investment properties is one of the surest ways to make sure that you’re making the most of your investments.
Where do you find ways to increase your investment revenue? Share with us in the comments.
5 min read
You can pick a new investment property that seems absolutely perfect in your mind. But is it really? Are you keeping your tenants top-of-mind when you purchase and when you decide to renovate? It is easy to lose site of THE single most important factor when real estate investing in long-term buy and hold properties. Tenant satisfaction leads to longer occupancy.
For real estate investors, tenant retention is one of the key elements to investment success. The longer you can keep good tenants around and fill any vacancies, the better your passive income will be. At Premier Property Management Group, the property management firm owned by the Clothier family and providing management service to Memphis Invest, the average length of occupancy per property across the $350 Million portfolio under management is just over four years.
While historically renting has been seen as a less-desirable alternative to home ownership, that perception has been gradually shifting, both in the U.S. and abroad. A 2012 study by Property Intelligence in the UK found that 60% of renters said that they were not reluctant renters. And the 40% that are reluctant are mostly frustrated would-be buyers than anything.
Even across pond, many of the same sentiments translate over here in the United States.
So when you’re thinking about your next purchase or considering renovations, keep in mind what tenants really want out of their rental homes.
3 min read
Winter is over, spring has sprung, and with it comes a new to-do list for taking care of your investment property’s roof. Real Estate Investors around the country are getting ready for warmer days and the opportunity to do some preventative maintenance to their properties. We hope you saw to it that the proverbial hatches were battened down for winter.
Now that the days are warmer, it’s time to venture outside for a fresh round of roof maintenance.
3 min read
Plenty of investors have come to realize that managing property management responsibilities is not for them. Being a real estate investor and being a property manager are two entirely different jobs. Not everyone is cut out to deal with day-to-day tenant issues. Many investors are looking for a means of passive income and know that they don’t want to add to their workload.
There are real estate investors, however, who’ve convinced themselves that they have to do it all. They have to be the owner and the manager simultaneously. There are reasons behind this line of thinking, and we can understand where some investors are coming from.
4 min read
An investment property can come in all shapes, sizes and values. As a real estate investor, it’s within your power to change the property value of your investments. There are many ways to measure value — and some that you think are helping may actually be hurting.
Real estate investing is all about knowing how to make the right improvements to raise the value of your investment property. Often times investors either make the wrong improvements or they hire the wrong team that spends too many dollars on the areas of a property that actually hurt the value.
3 min read
"They just aren’t built like they used to be."
People say it about practically everything that’s been around for more than a few decades — cars, houses, furniture, blue jeans. Usually it's said disparagingly in reference to a lack of quality and a nostalgia for “the good ol’ days,” but there have been improvements to some of the old ways. After all, we used to have lead in our paint.
2 min read
There's a reason that smoking bans have been so hotly debated, and it's clear to see if one frames the debate in a way that eliminates the smoking preference of either side. For instance:
Do you agree that people have a right to reasonable protection from the unhealthy choices of others?
Do you agree that people have a right to be free from unreasonable intrusion into their personal lives?