Buying into an investment property is exactly that – a big investment. It represents a significant outlay of time, money, and other resources, both tangible and intangible, and any prudent investor knows that it’s in their best interest to squeeze every bit of positive return out of their investment that they can. But that’s the real question, isn’t it? How exactly do you go about such a task?
With so many laws, rules, and regulations governing the residential and commercial investment arenas, it’s not like you can just do whatever you like. Besides, the market will only bear what it will bear. In other words, if you go into the world of investment without a plan, you’re likely to lose your shirt. But what if there were guidelines? What if there was a map you could follow that could show you how to increase the value of your investment property? Well, it just so happens that such a thing exists, and you’re about to read it. Excited? Good, let’s begin.
1). See and Exert the Maximum Potential of Your Investment Property
In a certain light, investors and their properties can be said to have a parent-child relationship. After all, an investor sees a patch of raw land, an apartment building ripe for occupancy, or some such other opportunity, and snaps it up. But what if that property could do more for itself (and for you)? What if, by taking advantage of zoning laws, for instance, you could turn vacant industrial buildings into new housing complexes or swampland into an aquaculture farm? The idea here is to make income-elevating changes to your properties.
These changes are sometimes large in scope, but they’re often quite small and manageable. Either way, there’s a technical term for them, and it’s the first way in which you can increase the value of any investment property you hold: To Create Highest and Best Use.
2). Buy Low, Sell High, Property Investment Edition
This is a business axiom as old as time, so you shouldn’t need much schooling in its importance. Still, some people may not be aware of how it gets applied to the property game, so here’s the gist of it: You buy property, usually condos or apartments to make it worth your time, at wholesale prices – the exact process of how to go about this is beyond the scope of this article – and then you use a unique twist of property law to grant each individual unit its own title. This process is called condominiumization, and you can use it to make a boatload of cash. Land can also be bought in large tracts and then parceled out via this process.
3). Make Sure Your Marketing is the Best in Town
Again, the necessity for a decent marketing funnel is Business 101, so it isn’t something that should need a lot of study. Still, it’s amazing how many investors either undervalue marketing as a tool or simply ignore it altogether. Who do you think will make the best investments, and in turn reap the most reward from those investments, someone with a five-star marketing plan who has made themselves a household name in the community, or someone who is barely on the radar at all?
You have to be a recognized player in order to be a force in the investment game. Estimates indicate that a properly marketed property can bring in 10 percent-plus over an improperly / poorly marketed one – and that’s if the two are identical. If you can do this yourself (if you’re good at it and enjoy it), go for it. If not, then make another investment in yourself and your business and hire a professional marketing firm to handle it, and consider the money well-spent.
4). Buckets of Sweat
There’s no substitute for hard work. Sweat will get you places even when you don’t have two pennies to your name, which is probably why even the super-investors still poke around the transition zones of their community looking for good deals on rehabs and renovations. As with marketing, if you’re good at construction and building things, feel free to take a hand in this process. Alternatively, partner up with a few trusted investors and tackle the project to save money, or if you’re a bit more flush, hire the project out. Either way, remodeling/rehab jobs can be a great way to take a wreck and turn it into a sale-ready property (and a great way to make a tidy profit, too).
When it comes to investing, sometimes you just have to take the plunge if you want to make a profit. Property speculation is a time-honored tradition in this lifestyle. It can end up helping you skyrocket the value of your investment property, whether it be a single unit or an entire portfolio. The trouble is, it can also see you tossed out on the street and living in a box if you don’t know what you’re doing. Remember: Property speculation is an emotional process – you have to stay firmly grounded in reason if you want to succeed.
Property investment can be tricky, but with this guide in hand, you should have no trouble at all increasing the return on your investment property. Thanks for reading, and good luck!
Get more stuff like this
Subscribe to our mailing list and get interesting stuff and updates to your email inbox.
Thank you for subscribing.
Something went wrong.