| Real Estate Deals - Common Misconceptions Are high-profit real estate deals only for the wealthy? Is it possible to buy with no money down? Do you really have to know the "right" people?... Fix And Flip - A Real Estate Formula Making money with a "fix and flip" property is a great way to make money in real estate. However, it isn't about repairing drywall and planting... Becoming A Battle Hardened Real Estate Veteran Without All The Scars: As part of a new web site that we just launched, www.GetPreconstructionDeals.com, I get repeated requests asking if a particular deal is good or not.... 7 Myths About Real Estate Investing That Are Costing You Tens Of Thousands Of Dollars Did you know that real estate investing has created more millionaires that ALL other industries combined? The question, then, is why are more people... How to select real estate broker So your sister just introduced you to her friend Irving, a real estate agent, and now you can't get rid of him, right? Wrong! Choosing the right... |
|
Real Estate Rentals - Selling For MoreSteve Gillman Selling real estate rentals isn't like selling houses. You can paint a house, and get a little more because it looks nice. Rental properties, especially larger ones, are different, because they're bought by investors, who look at income more than new paint. Raise the income, and you increase value to investors. Time to learn about capitalization rates. If investors in your area expect a capitalization rate of .08 it means they want a net return (before loan payments and taxes) of 8% on the purchase price. So if your three-plex generates $12,000 net income annually, they'll value it around $150,000 ($12,000 divided by .08). If you can make it generate $16,000, you make it worth $200,000. More Income From Real Estate Rentals Raising rents is the obvious way to boost income, if you can justify it. See what similar units are renting for. If your units are $60 below the going rate, you can raise the rents and not lose your renters. Increasing the rent $60 for three apartments means $2160 more net income annually. With a .08 cap rate, you just added $27,000 to the value of your property. There are other ways to raise rents. Maybe your tenants will agree to $30 more per month if you have a carport built. That's $1080 more net income annually, meaning roughly $13,500 more value added to your property. ($30 x 3 units x 12 months = $1080 divided by a .08 cap rate = $13,500) If you can build that carport for $4,000, that's a good return on investment right? What else do they want? Higher rent isn't the only way to get more income. Storage sheds can be rented to tenants or you could put in a coin-operated washer and dryer. With a larger income property, you could install pop machines. Reduce Expenses Of Real Estate Rentals Could you add insulation to reduce the heating costs? If you're paying $80/month for lawn care, will one of the tenants do it for $40? Could you buy cheaper insurance? Any way you can reduce expenses raises net income (unless it scares away tenants). A new $4,000 furnace that saves $800/year on heating costs means you just turned $4,000 into a $10,000 higher sales price. This isn't an exact science, and of course appearance and other factors matter. Increasing that net, though, is the surest way to get more for your rental properties. Make the changes at least several months before you try to sell the property (a year before, if possible). Also, learn how do the math - it really does matter with real estate rentals.
Steve Gillman has invested in real estate for years. To learn more, go get your real estate investing course free at: http://www.MakeThatOffer.com |
Real
Estate in Sedona Sedona, AZ 86336 |