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Road To 7,000 Pt. 15
March 10th, 2010Maximizing the Value of Your Apartment Investment
March 5th, 2010One thing I like most about apartment investing is that it gives any investor the ability to have a solid cash flow via multiplied profits. Additionally, I want to find a way to increase those returns and ultimately, increase the overall value of my property. How can I do that? Using the concept of forced appreciation, investors can make low- to no- cost changes and receive huge returns. Here are a few key ideas to maximize the value of your apartment investment.
Raising Rents
Many apartments aren’t being rented at market value. In fact, what you’ll find is that many apartments (especially those managed by the owners themselves) are rented for 10% – 20% below market value to attract and keep tenants long term. This is a great strategy and one that is easily executed however, keep in mind that the leases must expire before you can raise rents. For apartments, this period can be anywhere from monthly to annually.
Decreasing Expenses
Look for opportunities to decrease expenses. By that, I don’t mean that you should be “cheap” and cut costs on maintenance and repairs. I also don’t mean that you should take on property manage responsibilities. What I mean is that there are improvements that can be made such as installing energy efficient light, solar heating, and thermostats that ultimately save you money on your utility bills. You can also find cheaper alternatives for marketing your property, shop for lower insurance rates, and possibly even investigate if there are ways to save on taxes. Decrease your expenses, but don’t be cheap about it.
Improving Tenancy Rates
While there is no one single trick to improve tenancy rates, every investor still has to find ways to tackle this challenge. First, take a look at the tenant base of your apartment building. It will give you some idea of who is attracted to renting in your building. This information will then help you strategize your advertising to attract qualified tenants that are looking for the living experience you offer. I would also consider going beyond traditional print advertising methods and include avenues such as referral incentives and move-in specials.
Changing the Tenant Base
Some apartment buildings have tenants who aren’t the best for your investment. These tenants often include those who make late payments, no payments, or those who are involved in criminal activities. These kinds of tenants not only affect your bottom line, they also won’t help you attract tenants who are the exact opposite. Start to get rid of these kinds of tenants and focus on doing what it takes to attract your target tenant profile. This may mean that you’ll have to invest in repairs and upgrades, but in the long run, it’ll pay off big time.
Upgrading the Facility
Contrary to popular belief, upgrading your facility does not always include having major work done. While there is often, cost involved, the financial impact can be minimal compared to the returns you’ll receive. I’ve already mentioned several options for upgrading your building, but other simple, low-cost changes could be replacing property signage, upgrading the landscaping, and repaving the parking lot.
Adding the Extras
There are other opportunities that will not only add convenience for your tenants, but it will improve your bottom line. These amenities include things like vending machines for items like snacks, soft drinks, and laundry products. You might also consider adding larger scale opportunities such as laundry facilities, parking, storage facilities, and even a gift shop or convenience store. These added amenities will make your building more attractive to potential renters and help retain current renters longer.
Forced appreciation is a powerful strategy any investor can use to gain multiplied returns on their apartment building investment. Among their options, investors can do simple things such as raise revenues, decrease expenses, upgrade the building, and add convenience items for sale. These changes are relatively easy to make and often have low or no cost. Like any real estate investment, each property is unique and I recommend that you research your options thoroughly to determine which changes suit your property the best.
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“On The Couch” With Mike Oullette
March 2nd, 2010
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5 Easy Ways to Network Like a Veteran
February 24th, 2010You have one chance to make a first impression and in this business, networking is your key to success. I talk a lot about having teams of professionals who are ready to help you accomplish your goals. I also talk about making sure that your deal pipeline is full. None of this can happen without the proper people in place. Here are five ways anyone can do to network like they’re a veteran.
1) Look and act as if you were already a success.
The way you dress says a lot about you especially when people are sizing you up for the first time. The clothes you wear and the way you speak lets people know that you take your business seriously and that they should take you seriously as well. Would you do business with the guy who looked like he could make the deal happen or would you do business with the guy who looked like he needed as much help with his clothes as he did with his deals?
2) Go where the people are
Networking involves meeting people and it just makes sense to fish for people where the people are. Join organizations of people who are aiming to be as successful as you are. Check out your local Chamber of Commerce or Rotary Club. You should even check if there’s a local real estate investment club in your area. Let’s not forget that there are people already in your sphere of influence such as family and friends, acquaintances, and people you’ll be making contact with as you start building your commercial investment business.
3) Be a people magnet
People are drawn to nice people. Basic attributes such as being polite and respectful can go a long way when trying to establish contacts. Your positive attitude will shine through when you’re in a conversation with others. Speak highly of others whenever possible. I can’t stress enough that if you’re serious about building your investment career, you should never make an enemy. It’s never worth it to lose a relationship. Even if a deal goes sour, find a way to back out gracefully and salvage the relationship for the long run.
4) Follow-up, follow-up, follow-up
Keep in touch with people. A quick two minute phone call can do wonders in keeping you at the forefront of people’s minds. Don’t hesitate to send out postcards or letters that lets people know what you’re doing in commercial real estate.
5) Be prepared to make the next connection
Always have a business card ready and never be afraid to ask for a referral. Business cards help people remember how to get in contact with you and it adds a professional touch to the connection that was just established. But being prepared goes beyond just handing out business cards. The person you just met knows people too or he will soon know someone else who may just be your next buyer, investor or team member.
Networking is critical to make your investment business a success. You’ll need people to fill your deal pipeline. You’ll need a dream team of investors, tax accountants, real estate lawyers, assistants and others to help you accomplish your real estate goals. Follow these simple steps and you’ll be networking like a veteran in no time.
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Dave’s 3 Biggest Mistakes in Real Estate Investing
February 4th, 2010Apartment House Riches Bootcamp Day 3 Update
January 21st, 2010Would you like to be notified every time I post a new blog entry? Click here & subscribe to my blog!
Check back for new teaching videos from Dave at the Apartment House Riches Boot Camp!
Sign up below to discover how YOU can learn more about the strategies that Dave mentioned in the video!
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Apartment House Riches Bootcamp Day 2 Update
January 20th, 2010Would you like to be notified every time I post a new blog entry? Click here & subscribe to my blog!
Check back for new teaching videos from Dave at the Apartment House Riches Boot Camp!
Sign up below to discover how YOU can learn more about the strategies that Dave mentioned in the video!
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Apartment House Riches Bootcamp
January 19th, 2010Would you like to be notified every time I post a new blog entry? Click here & subscribe to my blog!
Check back over the next four days for a new teaching video from Dave at the Apartment House Riches Boot Camp!
Sign up below to discover how YOU can learn more about the strategies that Dave mentioned in the video!
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Where’s Dave?
January 15th, 2010Would you like to be notified every time I post a new blog entry? Click here & subscribe to my blog!
CLICK HERE FOR MORE INFORMATION ON COMMERCIAL REAL ESTATE
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Make a Real Estate Fortune Investing in Clever Ways
January 8th, 2010Would you like to be notified every time I post a new blog entry? Click here & subscribe to my blog!
I’ve always believed in learning from the best. In a real estate investment career that has seen me rise from the bottom of the ladder and end up with millions in the bank and more than 7,000 apartment units in my name across more than six states. I made mistakes, and learned from them, but I also made sure that I learned from those who were ahead of me and were successful.
As you’d expect I get asked for a lot of advice and many questions about the best way to succeed in real estate investing and in many cases I point those who ask to my workshops and courses which are designed to help new real estate investors gain the insights and experience-based information I would have loved to have had when I was starting my career. But I also give advice and insights away free because I too, valued such information when I was learning.
This brings me, rather neatly, to this piece. I am often asked what’s the best way to invest in real estate and my response is that there is no ‘best’ way as such. Each investment decision you make depends upon the circumstances you are in as an investor, what the market is doing and the level of risk you are comfortable with.
It is risk, or rather risk management, that for me is the deciding characteristic of a good real estate investment decision. Let me explain. Let’s say you go for a single-family dwelling. The moment you take it on, if you hold on to it, instead of flipping it fast for a profit, you have began to build a long-term, steady income stream that will keep on delivering good value to you for years to come.
At this point most real estate investors, quite rightly, also think of the drawbacks involved. Tenants moving, the property remaining empty for a couple of months, damage to the building and its fittings which has to be set right and the general cost involved in running it and overseeing it.
The smart money, of course, lies in perspective. Rather than see the problems of one such building multiplied a few fold the moment you switch and go for multiple-family dwellings, it pays to think that what you are doing, in this case, is spreading the risk of the negatives while multiplying the income streams available to you, all from one real estate investment decision.
The truth is that managing multiple-family dwellings is no more trouble than managing a single one plus, because you now have volume, you can achieve economies of scale, outsource the day-to-day running and management very cost effectively and never have to deal personally with a single tenant, ever!
This way of thinking and risk management is the secret to successful real estate investment and it is how you can make a fortune through clever investing.
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