Building Wealth via Investment Property
Investment property is a business of capital. That is, you put large sums of money into a property with the goal that you generate a higher amount of money by either selling or renting out this property. That is a pretty spartan explanation of a way of life. There has to be more to investment property than simply putting one sum of money into a venture, and getting a larger sum of money out the other end. To that I ask you to consider what is your purpose engaging in investment property activities.
There are various reasons that anyone gets into business – the overall explanation being “to make money.” But this can come in many different forms. One individual might have gotten into investment properties because they were laid off from their career job and needed some way to pay the bills. Another person may have had it on their mind that investment property would lead to large sums of money which would let them get that shiny new red Lamborghini. Whichever your reason for getting into the business, it is important to consider your purpose in order to determine your path.
Let us say that your purpose is to build wealth – and perhaps along the way make sure you can pay bills and live a comfortable lifestyle. There are two mixed signals in this idea. If your sole motivation is to pay the bills and live a comfortable lifestyle, then you are likely looking at your monthly costs – and you are likely making business decisions that lead to a certain amount of monthly income. Before I continue, there certainly is nothing wrong with this. You can invest in properties which you may other people to manage the rental of (thus resulting in passive monthly income).
However, if you want to build wealth – you need to think bigger, and faster. The single best way to build wealth is by selling. Think of big companies and their leaders (or former leaders) and how they got their wealth – Microsoft, Facebook, Google – etc. Did they attain their wealth by selling products every month? No. They attained wealth via IPO – selling large portions of their company to other people.
The fastest and easiest way to build wealth is by selling – which is a perfectly viable option for property investment.
The most common form of this is where you find the diamond in the rough – the junk property in the nice neighborhood – fix it up and sell it for a profit. Pretty straightforward. Ultimately this is about acquiring property at a certain price, improving the value of that property, and then utilizing the increased value to sell at a higher price.
You don’t have to limit yourself to buying, “fixing,” and then selling properties. Why not use this strategy for rental properties as well? Consider finding properties that could be turned into rental units – or which may already be rentals units but not performing at peak efficiency. You invest in the rental property at first – already you begin earning a monthly income, but when you raise the value to a certain point you sell for a large capital increase. Then you reinvest – rinse and repeat.
Anything can be sold – this is all about establishing value. There is great value in a rental property not just because of the property but because of the automated passive income that it can represent (provided you have established correct management strategy to allow you to be completely hands off).
Whatever you decide your goals are with property investment it is important for you to understand what those goals mean, so you can make the best decisions from beginning to end.
Photo: smarthomeagents via Flickr CC
Investing in Rental Properties – Why Hire a Property Manager?
The goal for investing in property is either to resell the property, or rent it out. Both can provide excellent return on the investment, but require entirely different focus and resources. Renting out property involves a large amount of work. You have two options – you can either Do the work yourself, or hire someone to do the work for you. In this article, I will talk about why you would want to hire a property manager.
Think about your real goal for renting out an invested property – you are looking for a return on that investment in the form of regular monthly checks. In order to make this happen on a rental property you have to go through a few steps. You need to have the unit(s) in the property condition and ready to receive tenants. Then you need to go find those tenants. Once you have found tenants who are interested in signing for a term, you need to make sure those tenants regularly pay you on time. You also need to make sure the building stays in proper condition while the tenants use it. What if a tenant is upset? What if a tenant wants to leave? There are a myriad of questions that can come along. Read the rest of this entry »
Chandler Property Management Tips for Improving Properties
Chandler property management is constantly trying to drive business and make larger profits with their rental homes. One way to do this is by keeping their properties looking top notch. It not only keeps tenants happy, but also helps to attract potential tenants. Consider these following easy and low-cost ways to help spruce up your rental properties.
- Update the Bathroom: By taking care of just a few bathroom details, you can make some significant improvements to your property. For example, replace the shower curtains and install a water-efficient shower head.
- New Paint: Applying a fresh coat of paint to the walls, trims, and even the kitchen cabinets can improve the visual appeal of any property.
- Window Coverings: Change all blinds or curtains before a new tenant moves in.
- Small Details: Replace all switch plates, cabinet handles, and drawer pulls.
While these may seem like small improvements, they really do go a long way in helping Chandler property management companies make an overall property appear much more inviting.
Three AZ Property Management Tips for Success
Budgeting can be a concern for any AZ property management company in order to be successful and prosperous. Although this can change any given day, there are ways to help the company withstand any downfalls and come out stronger in the end. Here are three important tips to keep in mind.
- Reorganize and Update Your Plan: It’s important to keep a watchful eye on your marketing plan and constantly review it to see if there is anything that needs improving. This plan is what attracts your future tenants.
- Save Money: Take steps to save money. One way is implementing an electronic method for your property management office. Try going paperless and making use of saving documents electronically. It is important to teach all property managers and office staff how to help save the company money.
- Be Attentive: You should always be aware of what is happening at your properties. Unpredicted expenses can produce difficulties for any AZ property management company; therefore, your property managers need to learn to handle different emergency maintenance circumstances that arise. However, reducing the possibility of maintenance problems can often times be prevented by performing periodic inspections of the property.
Arizona Property Management Tips on Rental Upgrades
If you are a rental owner involved in Arizona property management, you are most likely always looking for ways to improve the look of your rental homes. Even better is finding ways to upgrade without cutting into too much of the profits. Here are a few ideas that are effective, yet inexpensive, when searching for ways to improve the home.
- Discount Stores: When upgrading a rental home, you might be amazed at what you find at your local discount store. Some examples of items to look for are: shower curtain liners, drawer knobs and sink fixtures. These small details help homes look more attractive without placing a huge dent in your wallet.
- Low Cost Window Coverings: Your first choice is usually traditional curtains when you think of covering windows. Keep in mind these fade quickly and can be very costly to clean. A practically priced substitute is mini-blinds. Not only are they easy to install, but they can easily be replaced when a tenant moves out.
- Bulk Quantities: If you have a local building supply store, they may offer a discount for buying items in large quantities. A perfect example is light fixtures. One way to give a property an improved look is to have all the lighting coordinated.
Three Tips for New Phoenix Property Managers
For Phoenix property managers who are just beginning their careers, it can quickly become overwhelming. Once you have gained some experience, it will get easier. Here are three tips to help you with your property management duties:
- Cover all the bases with your lease agreement: The lease agreement is one of the most essential pieces of paperwork a property manager must deal with on a continuous basis. It states the rights and responsibilities for the tenant and property manager, therefore, it is important the agreement covers all the bases. This is what helps to protect the property manager from any difficult situations.
- Property maintenance requirements: Maintenance requests can be tough for Phoenix property managers, especially if they happen in the middle of the night. Although these situations are unavoidable, you can reduce the chances of them by performing regular inspections at your rental properties.
- Communication: This is a big part of any property management. Don’t undervalue the probability that you’ll be involved in face to face, e-mail and telephone conversations with tenants and property owners on a regular basis. It’s important to be a good listener.