Happy Spring, #Multifamily! To kick off the arrival of warmer weather, we have the honor and pleasure of welcoming guest blogger Doug Chapman of HomeDaddys.com. Take it away, Doug!
Tips To Maximize Your Property Investments
No matter what your reason is for investing in property, there are many things you need to do to make sure that your investment doesn’t become a bust. We all know that selling the unit is a chore in itself, but you need to make the right decisions running the property as well as keeping it the way you want potential tenants to view it. Each investor has their own ways to manage their property, but here are a few tips that I think will help maximize your property investments:
Invest In a Property Management Company
Even though it may cost a little extra money, it is a great idea especially if you don’t have the proper time or understanding how to get the most out of your property investment. Hiring a property management company will allow you to ease some of your anxiety of all the things that go into making a property investment a financial gain for you. The company will not only run the property, but it will also more than likely do the legwork to get the vacant property filled, especially if it is an apartment unit. The quicker it gets filled – and since you don’t always have enough time – the less money you are leaving on the table.
Purchase Before Project Is Complete
If a new property is on the horizon and you have done research as to the area and its surroundings, pull the trigger early and get the investment before the entire project is fully complete. Many times there are discounts (small ones, but discounts are discounts) when you invest and sign the dotted line before the building is complete. This will allow you the chance to potentially pick what unit(s) you would like to purchase, possibly with a great view or possibly close to an elevator/staircase. This sounds maybe a little elementary, but these things are what potential tenants are looking for in a unit. Therefore, by getting in the game early, you get the opportunity to get a great property with what will probably come with a discount.
Accelerate The Work Process
If you have invested in an apartment space to rent out, understand that there will be a ton of turnover – many tenants only rent for 1-2 years at the same place before moving on. That being said, it is critical to make sure when you are between tenants that you speed up the process on getting the space available for the next one to come in. The last thing a potential tenant wants to hear is that they can’t move in for several months – they instantly start looking elsewhere. None of us have the time to sit and wait for the next space to come available, we need it right now. Put yourself in the tenant’s shoes and understand that the quicker you do things to get the property ready, the quicker the money will start coming in again on that same investment. The work could include more than just cleaning the apartment from head to toe, it could mean patching up small holes in the wall and painting over them, or ensuring that all of the appliances are working properly. Remember do not take more than a week or two to finish the process, and remember the money you could be losing out on.
Prioritize The Upgrades
No matter what type of property investment you have, there are always going to be upgrades that are needed. Some more of a financial investment than others, but regardless there will be some. However, you need to figure out which ones are the most important for the long haul to ensure your investments will continue to grow as the years go on. All of the upgrades that you may make – whether it is something small in the kitchen or bathroom, or adding new decking outside – aren’t always going to raise the value of the property, but by not doing at least the minor upgrades throughout the years will shun potential tenants away, thus losing money.
Everyone who has invested knows how tough and stressful owning a property can be – hell if making money in real estate was easy everyone would do it! But we have all done it because we want to make money, and we want to continue to make money throughout the stretch of time that we own the property.
Author: Doug Chapman is a staff writer for HomeDaddys, a stay at home dad blog. He specializes in diapers and sippy cups, but is a successful real estate investor on the side.