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Investment is a hot topic now. With a considerable amount of cash, and smart investment decisions, you can earn several times of that initial investment amount. One type of investment in the real estate industry is in the form of rental properties. It is the form of real estate investment wherein investors buy living spaces (condominium unit, townhouse, etc.) ideally during their construction phase and, once finished, lease them out to tenants. It is an attractive investment due to its simplicity, reduced risk, and the stable inflow of cash. So, if you are considering this type of investment, how can you maximize returns and make sure you are getting the most out of it? First, you must determine the best rental price for your property. In condominium units, there are usually property managers that work for the property developer that would normally set the rental prices. However, if you consider investing in other properties, such as a house--giving you the flexibility to set the price, you might consider other alternatives. One way is to canvass the prices of other properties being leased out in nearby areas. Alternatively, you can seek professional help through companies that can assist you in determining rental prices. Another way to increase your returns is to develop and properly maintain your space. Keeping the property attractive and conducive to living is a sure way to make tenants willing to pay higher. It doesn't have to be too costly to make these improvements. Start with small developments that greatly affect the property prices, such as the kitchen and bathrooms. Little changes like better lightning, newly painted walls, and pest controls would make your place more inviting to prospecting occupants. You also have to be wary when choosing your tenants. Look for quality occupants that would stay for a longer term. Also, look for tenants who are mindful of your property. With this, you avoid having to do regular repairs that would cost you a lot in the longer run. Tenants who choose to agree to have a prolonged stay also relieve the cost of advertising to look for new tenants. Lastly, make sure to decrease the turnover of occupancy in your property. Vacancy means that you would receive zero cash flow while the space is empty. As soon as your tenant shows interest to leave, start looking for new occupants so you don't spend much time getting zero cash flows. Knowing how to manage your investment property well can give you maximum profit gains. Maintain your property well lessens your cost in the long run. Having high quality tenants that value your property the same way as you reduces the need to do regular fixes and avoids non-occupancy of your space. In the end, happy tenants mean higher returns to you.
Eyeing your first ever real estate investment? Let this be a guide before you make drastic and crucial decisions. Observe the common mistakes of real estate newbies and understand what you can do differently. Frequent Failures 1. Impulsive Investment “It felt right!” First time buyers, being unaware of key real estate matters, rely on their own instincts. Others let their feelings and emotions get to them and think it was “love at first sight.” This problem is usually caused by being fixated in the mentality of buying their own home when you are, in fact, buying as an investment. Having a subjective view on properties is not practical in investing; potential buyers might not perceive an individual’s personal visions. Not being able to justify your purchase on the basis of real estate standards will most certainly lead to a loss. 2. Skipped on Being Scrupulous It could be in terms of inspecting the property or going over the paper works. There are several scammers who seek to take advantage of the innocent newbies because they know that these people are not thorough in terms of their “method” of buying. At the very least, sellers tend to sugar-coat their truthfully unappealing properties. Ignorant buyers will be deceived and be enticed to purchase properties that are presented with false information and claims. 3. Working with the Wrong Realtor First time buyers try to compensate for their lack of knowledge by hiring an agent to support them in the transaction. But, here’s another problem: there are incompetent realtors in the market. Instead of helping buyers, they draw them closer to their imminent failure. 4. Obliviously Overpaying This is a combined consequence of all the mentioned mistakes. Since a buyer has no idea of what he’s getting into, he will pay for a property more than its true market value and incur a loss in the long run. Stepping Towards Success 1. Collect & Select Don’t restrict yourself to one property. You’re free to have options and to weigh the pros and cons of each. Do several oculars in different properties that fit your preliminary conditions. From there, keep filtering or eliminating those that fail to reach your standards. 2. Set the Authority Yes, you’re a newbie. But that doesn’t mean you have to be pushed around in the real estate world. You’re a buyer and you have the capacity to buy; that’s enough to give you power. Don’t let agencies and sellers make the decisions for you. 3. Do Appraisals As a part of the inspecting process, appraising can be done to be informed by a property’s market standing. This way, you’ll know if the seller has a fair price. 4. Think of the Future Essentially, you’re making an investment. It’s only necessary that you study the future 5. Hire a Legitimate Real Estate Agency If you can’t do it on your own, there are numerous real estate servicing companies that can provide you with every help you need! The Trend: Condominiums, should you join in? High rise condominiums are being developed everywhere as vertical constructions are getting more popular than horizontal. People are also putting their money in it; either buying as their own home or as an investment. It is arguable that buying a condo incurs a lot of costs (condo dues, etc.) in which will cancel out a lot of the cash in-flow even with the appreciated market value. Then again, if you are investing only as a secondary source of income (meaning your time is consumed mostly at work) buying a condo can still be a viable and profitable option given the following: 1. Low Maintenance The condo will increase its price in the future without making any developments and modifications in the property. Buy it, wait for the market value to increase, and sell it. If the costs are controlled, it’s easy money. 2. Cheaper by the Dozen There are companies who offer cheaper prices to buyers who will purchase more than one unit. With this kind of discount, the investment will be able to yield more. 3. Thriving Market Students, young professionals and newly-weds are always looking for a condo to rent and own. They are your potential clients and you should bring yourself closer to this market and make connections. The challenge here is how you are able to manage the costs and how you can sales talk your clients into agreeing with the price that will reward the investment risk. Playing the investment game presumes the possibility of a loss in which should be justified by the proportional amount of return.