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
Have you ever felt overwhelmed by options?
Fast food restaurants have space-age drink machines with 300 combinations of soft drinks. We’ve given endless choices at the grocery store, when shopping for clothes, when selecting shows to watch on Netflix.
Real estate investors, whether we realize it or not, are faced with the same slew of options when it comes to our investments. While it might seem like there’s just a handful of ways to go about this whole investment thing, new investors quickly find that there’s a whole world of strategies, variations, niches, and markets out there.
4 min read
Have you ever tried to follow a recipe, got to the end, and found that you’d accidentally skipped an ingredient? Maybe you used the wrong ingredient entirely! We’ve all had a good laugh over those really salty chocolate chip cookies, I’m sure.
Recipes gone wrong make a funny story. A good laugh. Sure, you waste a few ingredients and a little bit of money, but it’s just a small inconvenience in the grand scheme of things. It’s far more serious to leave something out of your real estate investment business!
Wait—how can that happen?
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.
3 min read
Starting something new, particularly when there is money involved, can be as daunting as it is exciting. For new real estate investors especially, getting going can be overwhelming.
On top of trying to learn about real estate investing itself, there are countless new laws to learn, from insurance and taxes to properties and tenants. You may be afraid of making a mistake, losing money or outright “failure”...and that’s all natural.
Instead of fretting about what could go wrong as a green investor, focus on taking the steps that will set you up for real estate investment success.
2 min read
It's safe to say that most real estate investors are in the business to make money and many are actually planning for an event. That requires planning and saving for that special something. In many cases, that something is retirement.
4 min read
There’s a gleam in the big city that attracts investors. In a lot of ways, they’re attractive. Living in New York City is a dream for some people, as is settling down in big gleaming West Coast metropolises like Los Angeles and San Francisco. Memphis, while it is a big city, is nothing compared to Dallas and Houston in terms or the size of the city. Memphis is small city real estate and investors sometimes don't recognize it as a gem!
These big cities get most of the attention from investors and truth be told, you can go anywhere in the world and mention these cities and people know exactly where you are talking about. Ask them about small and medium cities and the chances of people knowing about them get slim. Real estate investing is about more than the name and size of the city.
4 min read
We all have regrets in life. Some of us have real estate investment regrets. If you’re stuck with a rental property that’s weighing you down, you may find yourself wondering if you should just cut your losses and move on. Maybe you want to stick it out and hope for things to get better down the line. There are several options to weigh if you’ve found yourself at a crossroads with a property you own.
At the same time, understanding the big picture is just as important and learning that fluctuations in the way a property performs and the way a property fits into your portfolio are important too. A down year is not always a reason to let a property go. It takes careful and thoughtful evaluation before deciding to let got of a long-term investment property.
3 min read
If you’re new to real estate investment, you’ll find out pretty quickly that the learning curve can be steep. One of the most important parts of real estate investment is to educate yourself on the legal aspects of the business. The last thing you want to happen is to find out you’ve made a legal mistake...after you’ve already made one.
3 min read
Investing in real estate may be something you’ve been considering for awhile now. It’s something you think you’d really like to do, but you still haven’t quite committed to jumping into real estate investment. Maybe you are still in the learning phase and realize there are a lot of questions you need to be asking before moving forward.
Part of that still, perhaps, is that you aren’t asking yourself enough questions (or the right questions).
If investing in real estate is just a theoretical idea of saving retirement money or building reliable passive income, take that dream to the next level. Instead of daydreaming about all the benefits of real estate investment, it’s time to knuckle down and make your decision.
Your security later in life - the security of your investments - relies on your getting answers to serious questions now and surrounding yourself with a great TEAM before moving forward. What better way to vet a great team than to get the answer you need and make sure you are pointed in the right direction as a real estate investor.