Oftentimes, when people think of real estate investment, they either get too excited or too nervous since real estate can really be daunting. Some even think that investing in real estate is a get-rich-quick scheme, and many believe that investors get rich overnight by letting their money work for them, but this is not the case for everyone. Of course, who would want to invest in something that is not profitable? But then again, proactively taking the opportunity to boost your real estate returns is still the way to go if you want to maximize profits. Worry not, here are some tips by Millionacres to help you make the most out of your property:
- Decrease vacancy
Vacant units get no income, and no income means no return of investment. Thus, it is important to make sure that you get tenants, may it be for your office, residential, or retail spaces.
2. Increase rents
As mentioned above, keeping your properties rented will give you a steady cash flow. However, it is important to keep your rent fees at par with market standards. Those with below-market rates can take advantage of this by increasing their fees which, in turn, will give them additional income.
3. Decrease expenses
Decreasing expenses means more income which means more return of investment. Although not always feasible, simple things such as properly managing a space or reducing overhead expenses could help boost your stream of income.
4. Add additional streams of revenue
Additional streams of revenue can help boost your return of investment. This can be done through charging rental fees for additional space such as parking or garage space, collecting late fees, selling goods or inventory, and collecting monthly pet rent (if allowed).
5. Improve the property
Improving your property may not always increase your rate of return, but it can help add value to your property which you can take advantage of by increasing your rents or getting new tenants. Moreover, improving does not necessarily mean planning expensive renovations. It could simply mean adding ergonomic furniture, energy-efficient appliances, and adding green spaces which could also help decrease your overhead and utility expenses.
6. Expand
If your property is currently performing well in the market, you may consider expanding, may it be by acquiring more properties, adding more rental units, or constructing new buildings. This may not always be the option, but some investors target properties that have an additional land which could be taken advantage of by adding additional units, buildings, or rental space.
The bottom line in real estate investment is to make the most out of your property and get the greatest possible return. Real estate investment is not a joke and should be taken seriously since it could make or break your wallet. Thus, before acquiring a property, you should first establish your goal on why you want to go into real estate investment and see whether it is for you or not. Read here for more tips on buying rental property.
Sources:
Brumer-Smith, L. (2021, February 4). 6 Ways to Boost Your Commercial Real Estate Rate of Return. Millionacres. https://www.fool.com/millionacres/real-estate-investing/commercial-real-estate/6-ways-boost-your-commercial-real-estate-rate-return/