Search
Recommended Sites
Related Links






Valid XHTML 1.0 Transitional

Valid CSS!
   

Informative Articles

Dealing With Dual Real Estate Agents
Historically, real estate agents have represented the seller of a property. The seller, after all, is usually the one who pays their commission, and agents therefore have a fiduciary relationship with the seller. This in no way means that agents...

How To Become A Savvy Real Estate Investor
If you've turned on the television lately, at some point you'll hear the experts praising the virtues of diversification. Real estate has long been considered a conservative, long-term strategy to growing wealth. While some seasoned real estate...

Making Money in Real Estate
WARNING: This single step can double your real estate investing income in the next 90 days. Decide on your target market Determine what your target market will be. I know from experience that it is really easy to want to do...

Real Estate Investor's Lockbox Strategy
How do "ordinary" people get rich in real estate? They buy 4 or 5 single family homes and hold them until they double in value. But wait! This article is not about getting rich... this is about you who already have an awesome gain in real...

Real Estate - Make Home Buying Pleasant
Fun and purchasing a home are probably two concepts that cannot be further apart. Instead of being fun, purchasing a home might prove to be nerve-wracking and stressful. This is understandably so since this is an investment that spans a lifetime...

 
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

Sign up for PayPal and start accepting credit card payments instantly.