| Selling real estate rentals isn't like | | | | meaning roughly $13,500 more value added to |
| selling houses. You can paint a house, and | | | | your property. ($30 x 3 units x 12 months = |
| get a little more because it looks nice. | | | | $1080 divided by a .08 cap rate = $13,500) If |
| Rental properties, especially larger ones, | | | | you can build that carport for $4,000, that's |
| are different, because they're bought by | | | | a good return on investment right? What else |
| investors, who look at income more than new | | | | do they want?Higher rent isn't the only way |
| paint. Raise the income, and you increase | | | | to get more income. Storage sheds can be |
| value to investors.Time to learn about | | | | rented to tenants or you could put in a |
| capitalization rates. If investors in your | | | | coin-operated washer and dryer. With a larger |
| area expect a capitalization rate of .08 it | | | | income property, you could install pop |
| means they want a net return (before loan | | | | machines.Reduce Expenses Of Real Estate |
| payments and taxes) of 8% on the purchase | | | | RentalsCould you add insulation to reduce the |
| price. So if your three-plex generates | | | | heating costs? If you're paying $80/month for |
| $12,000 net income annually, they'll value it | | | | lawn care, will one of the tenants do it for |
| around $150,000 ($12,000 divided by .08). If | | | | $40? Could you buy cheaper insurance? Any way |
| you can make it generate $16,000, you make it | | | | you can reduce expenses raises net income |
| worth $200,000.More Income From Real Estate | | | | (unless it scares away tenants). A new $4,000 |
| RentalsRaising rents is the obvious way to | | | | furnace that saves $800/year on heating costs |
| boost income, if you can justify it. See what | | | | means you just turned $4,000 into a $10,000 |
| similar units are renting for. If your units | | | | higher sales price.This isn't an exact |
| are $60 below the going rate, you can raise | | | | science, and of course appearance and other |
| the rents and not lose your renters. | | | | factors matter. Increasing that net, though, |
| Increasing the rent $60 for three apartments | | | | is the surest way to get more for your rental |
| means $2160 more net income annually. With a | | | | properties. Make the changes at least several |
| .08 cap rate, you just added $27,000 to the | | | | months before you try to sell the property (a |
| value of your property.There are other ways | | | | year before, if possible). Also, learn how do |
| to raise rents. Maybe your tenants will agree | | | | the math - it really does matter with real |
| to $30 more per month if you have a carport | | | | estate rentals.Steve Gillman has invested in |
| built. That's $1080 more net income annually, | | | | real estate for years. |