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Informative Articles

5 Hot Tips for Successful Real Estate Investment
The last downturn of the global stock market saw millions of 'every day' investors having their fingers badly burned. Overnight life savings were eaten away, retirement funds went into decline and the economic forecast for all of us who had any...

Are Tract Houses The Right Option For Today's Florida Real Estate Buyer?
If you have been in the market for Florida real estate, then you have seen them. Tract houses, also known as Cookie Cutter houses, are known for their matching exterior façade, identical interior features and no deviation from the original...

Buying Real Estate for the First Time
Buying a house for the first time can test the nerves, it is exciting and overwhelming. You hear all the time about rising home prices and how buying a home is a good investment. Purchasing Real Estate is a good investment but you need to...

Direct Mail and The Real Estate Agent
For many agents, the most utilized forms of advertising and lead generation are former client contact, which may or may not lead to referrals for new business, and the old standby, the local real estate magazine. All are great ways to generate...

Ten Ways Of Financing Real Estate
Do you remember when real estate financing meant you saved up enough to put 20% down on a house, and then you got a mortgage loan for the other 80%? Well, you can still do that, but there are many more options now. Here are ten of them. 1. Gifting...

 
Real Estate Rentals - Selling For More

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.

About the Author
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

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