6 Steps To A Higher Return On Your Real Estate Investment

Read recently on Smith Real Estate Services’ blog, this post about how to make more money on your real estate investments.  It’s a good article about how the returns investing can bring can be controlled in more ways then we realize.  The text is copied below, thanks to the guys at Smith Real Estate Services for doing such a good job on this …

1.  Know your holding period

the amount of time you plan to hold an investment property is an
important consideration in determining what you will pay for a property. You make your money going into an investment.


in the market and/or area could dramatically affect the value of your
property.  For example, if you buy in a redevelopment area, you may
plan to buy the property at a low price, renovate it an then lease it
out for significant cash flow.  If you are among the first to renovate
in the area, it may take you awhile to lease out the space. 


your goal is to hold this property for 2 years and you are the only one
in the block renovating, you may not realize a very dramatic return,
even after you renovate.  However, if your holding period is 5 years
and others are making significant improvements in the area, you would
most likely see a dramatic increase in your property value.


2. Choose the right agent/broker

There are four key factors to consider when making your selection:


  1. Specialty (retail, office, industrial, land, apartment);
  2. Leasing agent/broker vs. Investment agent/broker;
  3. Time to dedicate to your property;
  4. Ongoing communication with you about your property.


3. Set the right price

Performance measures are ratios (ie. cap rate, cash on cash, etc). Working
with performance measures can often lead to opinions, causing you to
either leave money on the table or price your property out of the


Measures of value allow you to make comparisons between investments and and take into account the time value of money. When
you can reduce numbers to a comparable measure that takes into account
the most relevant factors of property ownership, then you have numbers you can use for sound decision making in pricing.




eting Mastery

Cast a broad net. You and/ or your agent/broker may have knowledge of certain buyers. Those buyers may not be buying your specific property at this time. For this reason, it is important to get the message out to as many people as possible. After all, you do not know where your next buyer is!


5. Negotiate skillfully

and Money are what most deal points break down to. Because your
agent/broker works for you, when they understand your objectives, they
can make sure you keep the deal in play while protecting your
interests. If the deal dies, you want it dead because you were unable
to reach an agreement on your terms.


6. Post Contract details

A time line with accountability is key. It is not just the job of the escrow officer to make sure all of your details are handled on time. A detail-oriented professional should be a part of your team. This can help you avoid those last minute details that can kill your deal.

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