The real estate boom is a magnet for both established and new investors. In a world of economic uncertainty, investors want to diversify their interests in profitable ventures. Investments in real estate market appreciate in monetary value annually and provide a source of passive income.
All investors keep asking the same question. How do I make more money from my investments? The answer lies in promoting efficiency in running and managing the properties. You also need to add value to your estate. That way, you give tenants a reason to stay on your premises. This article provides generous tips to earn you the extra coin.
First, you need quality tenants on your property. These are the residents that need the space you offer for use in the long term. For instance, industrial buildings, warehouses, and flat apartments attract quality and long-term clients. In this case, there’s a constant flow of rent from the lease.
Remember there’s always a cost incurred by the landlord every time a tenant vacates. This fee includes the repairs on walls and floors, fittings and that new paint job. If a building has four new tenants come and go in a year, it means the landlord incurs quite a significant amount of money. Compare that with the client who lease your premises for two or more years; they may even offer to take care of repairs and painting.
Property owners are always advised to keep exploring ways of adding value to the estate. For instance, a car wash maybe a convenient addition in an area with a line of apartment blocks. A laundry room may also be incorporated as it gives tenants convenience and an extra incentive to stay around.
The subject of reviewing and adjusting rent and lease rates is a sensitive topic. Though the residents always want to pay as little as possible, the owner of the property must also earn fairly by prevailing market rates. Blake Hilgemann, a real estate investment adviser, encourages property managers and owner to conduct thorough market research before reviewing rent rates. Also, the increment should only be a small percentage of about 2% of the rent.
In any industry, there are regulatory authorities mandated to ensure compliance. In the real estate sector, strict guidelines govern the construction, management, and safety operations. The owner is also expected to pay taxes and land rates. Always comply with local and national authorities to avoid hefty fines and penalties that translate into losses.
Finally, you would want to insure your property and tenant’s belongings just in case of a disaster. The insurance market now possesses generous insurance policies for landlords covering owner’s liability, loss of rental income, accidental damage and even terrorism.