Waxhaw NC Property Management- Enhance Your Investment For Sale

By
Real Estate Agent with David Morton Real Estate 213092

Enhance Your Investment For Sale

There comes a time during the course of any real estate investment when it becomes clear that selling off the property is the best course. When that time comes, getting the most out of your piece of real estate is crucial to seeing the big payoff at the end of the real estate investment experience that you have been expecting over the course of the investment, often many years.

When selling your personal home, improvements like new landscaping and new interior work can net big benefits in a raised sale price. Investment properties are much different and going through those types of improvements are nice, but they will not add real value to a property that is being investigated by potential investors.

Raising the value of your investment property goes beyond a coat of paint and is affected most by the cash flow that can be seen from that investment. There are two key ways to make an investment property increase in value in the eyes of a potential investor, increasing the income and reducing expenses.

Bigger Income
When you raise the income seen by the property, you raise the value of your investment property. While that can seem like a daunting task, there are some maneuvers that can be undertaken to make a property more attractive to investors. Raising rent is the most obvious way and while any raise comes with opposition by current tenants, if the real estate market justifies the move, it has to be made.

Many times landlords will get into a rental rut just to avoid a potential confrontation over a $30 per month increase. Getting over that fear can result in better cash flow, but only during times when the market justifies the move. If the market doesn't justify it, perhaps a few improvements to the property can.

Adding components that current renters want can justify a raise in rent that they will not bristle to. Raised rent not only helps cover the expense of the improvement, but adds permanent value to your property that can be realized whenever you decide to sell it.

Smaller Expenses
In situations where it may not be feasible to raise rents either because the market won't allow it or renovations are not possible, reducing expenses is the best way to increase the profitability of a property. Remember, an investment property's sale price relates directly to profitability.

Many times, these types of steps take planning and time to recover expense. Adding better insulation to a property can save on energy bills and over time, it is possible the improvement will pay for itself. At the same time, you can charge more for your investment property because a reduction in energy expenses adds to profitability.

These types of moves are unique to each property and achieving lower costs on things like lawn care or snow removal may be more readily available in some areas than others. Do what you can within your limitations to reduce cost in anticipation of selling so that when the time finally comes, you can point to low expenses and high rent income as proof that you deserve a higher selling price point.

Of course, in a perfect world you would be able to increase income and reduce expenses at the same time, giving you a much more attractive real estate investment that will command a better selling price on the open market.

More realistically, there are at least a few small steps you can take to enhance your investment property in anticipation of placing it on the market. Don't let your real estate investment go out with a whimper. Work to get all that you can out of it to ensure a great return on what is often times a labor of love.

Posted by

David L. Morton Tor Realtor in North Carolinahttp://www.facebook.com/pages/DL-Morton-Realty-Inc/108432675858472http://www.facebook.com/pages/DL-Morton-Realty-Inc/108432675858472David Lee Morton DL Morton Realty, Inc BlogDL Morton Realty, Inc Home Search

Comments (4)

Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

Preaching to the choir here, David....I have clients who buy MORE rental properties once they learn the joy of having it professionally managed. DIY landlords often get overwhelmed and fail in their investment strategy by not hiring a property manager.

Feb 11, 2013 07:48 AM
Hella Mitschke Rothwell
(831) 626-4000 - Honolulu, HI
Hawaii & California Real Estate Broker

David: Excellent advice. I know some investors who are finding their own tenants, and then will do pretty much anything to keep them, like not upping their rent, or even, not charging enough to start with. They should hire someone like Wallace Gibson, to not only find the best tenants, but also maximizing expenses.

Feb 11, 2013 10:53 AM
Tom Arstingstall, General Contractor, Dry Rot, Water Damage Sacramento, El Dorado County - (916) 765-5366
Dry Rot and Water Damage www.tromlerconstruction.com Mobile - 916-765-5366 - Placerville, CA
General Contractor, Dry Rot and Water Damage

Great advice David, something the investors need to think about.

Feb 11, 2013 12:12 PM
Michelle Francis
Tim Francis Realty LLC - Atlanta, GA
Realtor, Buckhead Atlanta Homes for Sale & Lease

David, 

Great blog post!  I just had a great discussion with an investor who shared they were afraid to raise a rent price, as Zillow says it's rented above average rent right now.  PRICELESS!  Rental prices are up and their rent is below market.  Your advice is spot on. 

All the best, Michelle

Feb 12, 2013 06:09 AM