These 4 tips can help you manage your investment property in Colorado Springs
The best investment on earth is earth.
- Louis Glickman
Your number one goal for your property investment portfolio is to grow your revenue. As a real estate investor you are looking for the maximum return on investment (ROI) for your financial outlay. You want to make sure that you stay on top of your responsibilities as a landlord which can often be an arduous task. It is crucial that you endeavor to do the necessary research to come out on top.
Here are 4 tips for managing your Colorado Springs investment properties.
1. Choose A Specific Strategy
Buy land, they aren’t making anymore of it.
- Mark Twain
You might already have an extensive property portfolio or perhaps you are starting out in the game, either way your best investment will be in your own education of the industry. There is an old adage that says, “the more you know about investing the less money you need to make a lot of money”.
Educating yourself about property investment allows for unlimited profit opportunities. Read top selling books on property investing or attend seminars or webinars to formulate your own winning strategy.
Don’t be the person just going out there buying properties without a second thought –create specific goals for your investment.
Do you have a particular figure in mind for generating passive income over a fixed time period? Are you investing in a short term, high yield investment or are you looking for incremental profit over many years?
When you know what your end goal is, you can formulate a strategy that will determine how you buy and manage your portfolio. This saves you time and money in the long run.
Make sure that your strategy is realistic and that you are financially able to deal with increased interest rates on home loans every year. Can your current property portfolio withstand drastic changes in financial markets?
You need to make sure there is sufficient wiggle room to provide a buffer in case of hard times. Also, your property is going to need constant maintenance so ensure you do not experience cash flow problems in case of emergencies.
You must ensure you have an “emergency fund” to cover these costs for every property you own. These costs must be worked into your initial strategy. Your strategy is the foundation of your property investment process. The next step is managing the actual property.
2. Hire an Exceptional Property Manager
Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.
- Franklin D. Roosevelt
Managing properties and tenants is a highly specialized job. Yes, many people manage their own portfolios but if you have no experience in this regard and have another career, the best alternative is to hire a renowned and effective property manager. They are able to handle the complexities of getting the property tenant ready, setting the right, realistic price for the property, handling contracts and leases, screening tenants, doing inspections, handling all maintenance issues and minimizing tenant turnover. They can advise you on following landlord tenant law to the letter. The payment for these services will most likely result in a higher ROI as you will be avoiding common mistakes and pitfalls.
3. Strive to Increase the Value of Your Properties
90% of all millionaires become so through owning real estate.
- Andrew Carnegie
You should always be looking to make more money from your property. You could look at buying cheap properties that are in need of desperate repair and renovate them. This increases their equity and will result in receiving higher rentals.
With increased equity comes the opportunity to borrow against it to further your investing plans. Upgrading and renovating existing properties with minor or major changes as well as keeping them well maintained, only increases their value (capital gains) and your bottom line. It can be as simple as slapping on a new coat of paint, sanding wooden floors or carpeting an area or as complex as adding extra rooms, a swimming pool or landscaping the garden.
When you add value, you increase your potential for buying more properties. You could also look at providing your tenants with such incredible customer service that you can easily raise the rent incrementally each year –the tenants are invested in a good relationship with you. Your increased rental rates will be in line with the superior service you provide.
4. Always Look for Innovative Ways to Cut Expenses
Buying real estate is not only the best way, the quickest way, the safest way, but the only way to become wealthy.
- Marshall Field
You need to constantly evaluate your expenditure on your property portfolio and ascertain where you could be cutting back on expenses. You’re looking to reduce costs without compromising the marketability of your property. Shopping around for the best property manager, maintenance service providers and making your property more energy efficient are just a few ways to lower your costs. Just by adding insulation to a property could result in hundreds of dollars in savings over a year.
There are also massive tax deductions available to property investors which is why it is such a lucrative investment. You want to take advantage of these savings by filing correctly.
You must keep up to date records of all of your documents pertaining to your properties as well as all of your expenses and revenues through the year. You need to preserve both digital and physical copies of legal documents, insurance policies, tenant leases, property title, entertainment and advertising costs, wages paid, travel expense, mortgage and credit card payments and repairs executed.
Also make sure that you are in possession of good landlord insurance as you don’t want to suffer massive losses in the form of tenants abandoning the property, damage from natural disasters or malicious intent. Although it doesn’t cut back on expenses it can save from forking out huge amounts if you are uninsured.
If you’re not going to put money in real estate, where else?
- Tamir Sapir
Give us a call so we can offer you advice and revenue generating solutions for optimally managing your property investments in Colorado Springs. As the worldwide economy becomes increasingly volatile and share markets fluctuate, property is still the cleverest alternative investment.