For most investors, a good investment in rental property often means buying cheap properties. However, if they just look beyond low priced properties, they would be able to see other profitable investments. There are so many possibilities to make profits through other investment means.
Different factors motivate owners to sell their property below market value. Some sellers are willing to sell their home quickly to make the cash they need or simply because their home is in foreclosure and in some cases, the owner isn’t even aware that they are listing their home below the market value. Whatever the reason, there are plenty of opportunities to find quality homes at a valued price without having to seek the cheapest priced homes in order to make a profit on rental properties. Once you own the home, you can always have the home appraised by the lender or bank to assess its true value. Better yet, once you get a more accurate appraisal on the value of the home, you can turn around and resell it at that price and make a quick profit on the property. The philosophy of buying low and then selling high is popular, but one should also look at the long-term investment of rental properties and the higher income that rental properties can generate over time. You don’t always have to sell your property in order to make a profit.
You can also increase the value of your property based on the repair and upgrades that you make to the rental property. What it is worth at the time that it was purchased and what it will be worth once it has been renovated are two completely different concepts. The value of the home can be increased simply by adding a new layer of paint onto the walls or re-carpeting the floors. A neater garden with well-pruned plants and shrubs would give an illusion of a bigger yard, which also adds value in the eyes of potential renters. Or, consider converting spaces, such as the dining room, into more functional spaces and see the value immediately increase. Simple tricks and a little investment towards upgrading the home would easily attract renters and increase the value of the property up to 20%!
Once your renters move in, be sure to stay on top of rental prices in the area and charge your renters at the market value. Many landlords often undercharge tenants for rent simply because they failed to keep on top of the market trends in their neighborhood. If you do your research correctly, you can increase rent steadily without losing your tenants. Furthermore, if you’re aware of the market prices for your property you can still earn a little extra income through rent increases simply by adding little upgrades to the rental property. Of course, this would require some negotiating with the tenant, but it’s definitely something to consider.
While there are many ways to maximize the overall profits, it’s certainly important for you to utilize multiple strategies to meet your investment goals.