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Four simple tricks property investors use to make money


moneyMaking more money in property investment is not always about acquiring additional properties.  In fact, sometimes ‘more’ is not better when it comes to real estate investment.  Instead, the emphasis should be on how to make your existing properties more profitable.  In this way, you can make more money without the headache of managing a diverse portfolio of real estate investments.  So, if you are interested in making money, then read these four tricks property investors use.


1. No Vacancies

It boils down to this, if you have empty space to let then you are not making any money.  Did you know that every month with an empty unit reduces your revenue potential by 8.3%?  As you can see keeping units occupied is important.

The best property investors seek to minimize vacancies as they understand how this impacts their bottom line.  Part of the way they achieve this is by making sure they have a close relationship with their tenants.  Doing so will allow an investor to have time to find another tenant to occupy the same space – thus, limiting the time that the unit remains empty.

If you own multiple properties, then you will want to work with your team to make sure you have a plan in place to get new tenants into your properties as soon as possible.  One trick is short-term rentals such as summer rentals in college towns or pop-up type shops if you have commercial properties.  While these rentals may be discounted from the regular rates, they will keep the income flowing while you sort out who will be the next tenant.


2. Taking Care

It pays to take care of your properties.  It might sound counterintuitive but small investments and a good planned maintenance program can make you money in the long-term.  Not only will your properties be in better condition, which mean you grow your rent roll, but you will find yourself not paying as much for surprise repairs.

While many property investors focus on HVAC and plumbing, they should also look at the building and even the grounds.  This includes exterior paint, landscaping, and parking lots – maybe even a tennis court.

For example, large property investors and even large tenants such as McDonald’s and AutoNation often turn to Platinum Paving for help.  They know that keeping their parking lots in tip top condition is the best way to welcome customers to their businesses.  Even if you have a parking lot with 10 stalls, you should want to make sure it is in good shape.   Doing so will make it easier for your tenants to run these businesses, which in turn, will net you more rental income.


3. Smaller is Better

The challenge with having a big anchor tenant is that you are more closely tied to them than if you had several smaller tenants.  While a supermarket will bring traffic to your properties, you want to make sure that you hedge your bets in case they plan to move.  Part of the way you can do this is by having rental units of various sizes.
Another way is to subdivide units as the cost of an empty rental unit is less than a larger one. While this might be a bit harder to achieve with a residential property, the rise of ‘in-law’ apartments show how going smaller is one is a big trend among property owners around the country.

It comes down to dollars and cents.  If you have two units generating $1,200 per month in rental income, adding a third unit which generates $700 per month can increase your monthly rental income by nearly 30%.  Imagine if you had 10 and you could add another three or four units.  The windfall could be tens of thousands of dollars per year without increasing rents.


4. Services

Another way to make money from rental properties is to add services.  These can include items such as laundry, vending machines, or cleaning and landscaping.  A bonus of adding these services is that it will raise the value of your properties.

This is especially true if you have residential properties as the services will not only make your properties more desirable among potential tenants, but they will also give you the springboard you need to increase your rents.

In the end, you should treat property investment like a business and by following these simple tricks you will find it easier than ever before to make money from your properties.



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