Investment Property Money-Saving Tips
A penny saved around your rental property is a penny earned on your bottom line
Before buying an investment property, especially if it's your first, think about all the ways to make and save money in real estate. There are some obvious and not-so-obvious methods to accomplish this goal. Take care of the pennies and the dollars will take care of themselves.
Most new real-estate investors assume that the best way to make money on an investment property is to buy it for cheap, cheap, cheap and then wait for it to appreciate five-fold. While one of the tenets of any kind of investing is buy low, sell high, it's not the only way to be successful. Like most activities in life, if you take care of the little things, everything else will work out.
Here is a list of money-saving tips to increase the ultimate selling price of your property:
- Cash flow is a very important factor when owning a property. Have you done everything possible to reduce your monthly expenses? Is your mortgage rate the very best offered by your bank? If not, why not?
The same applies to your other expenses like property taxes, insurance, maintenance fees and other related property management matters. It's easy once you've bought the property and rent is rolling in to sit back and get a little lackadaisical. Don't, because every dollar in increased cash flow affects the ultimate price you get for your property.
- When doing capital improvements to the property, try doing the work on your own, without professionals. It will save you lots of money. That's only if you're handy enough to do the work yourself. If you need to hire contractors, make sure that you get referrals and that you confirm the work done was satisfactory as well as reasonably priced.
- If laundry facilities are in the building, install commercial machines that are coin-operated. It will bring in a little extra revenue.
- Install energy-efficient lighting. Although your tenant might pay the utilities, the cost savings on their hydro bill will be a selling point for future tenants.
There are only two ways to increase your wealth: spend less or make more. By taking advantage of both, you're ultimately improving the price others will pay for your real estate. Remember the golden rule: cash flow is king.
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