New Kitchen - Granite - Stainless
 
BEFORE
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Added French Door
BEFORE
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Investments? I don't think I can? For many years, I thought that investing in property was for those who had a TON of extra cash lying around. How would I, on my modest income, buy an investment property? Here's the simple, correct way of looking at investments. Something I had to figure out by DOING...lol. SHRINK YOUR FOCUS. When I first started looking into investment properties, I started right at the top; single family homes. I started here because that's what I was familiar with. I lived in a house, so it only made sense to look at similar homes. I soon found they were WAY to expensive to make any sense, and I was forced to stop in my tracks. I was going about it ALL WRONG. First, think small. On the current market you can purchase a 2 bedroom, 2 bath condo in a nicer complex for under $50,000. Yesss, you have HOA (condo) fee's to factor into your numbers, but they're simply another part of the money crunch. Focus on one thing at a time; how much can you afford to spend on the purchase? Second, look at EVERY purchase from the perspective of WHO CAN AFFORD IT. What type of money would the tenants need to make to comfortably move in? If you purchase a 4 bedroom, 3 bath, $400,000.00 home, you're catering to the very well off tenant, or buyer. This narrows your client pool. However, lets say you buy a $50,000.00 condo. You fix it up and rent it to winter tenants (like I do), or young couples on a limited income. Your client pool just got a bit larger. You now have an opportunity to attract a huge client base, increasing the odds that your INVESTMENT will provide a return. My first investment property was a 1 bedroom, 1 bath 630 SqFt condo, in a complex built in the mid 1980's. The inside was original, and needed updating. I ended up buying it for $32,000.00, and invested another $15,000.00 in the renovation. I gutted the inside, added a french door to open the space, and installed a top-notch kitchen (cabinets, granite, crown molding, high-end fixtures). The bathroom was treated in the same manner. My goal? To bring the condo up to my standards, and to a standard that would justify my goal rent. I also looked at the property as a possible “retirement property” for myself and wife. Often I would ask myself one simple question. If I was paying $1,500.00 per month for a 1 bedroom, 1 bath condo, what would I demand? My answer? It better ooze class from the minute I opened the door. I also crunched the numbers in this VERY, simple way... $1,500.00 divided by 30 (days) equaled $50.00 a night. First, where could my clients even rent an AVERAGE hotel room for $50.00 a night? Second, how much would I pay a night for my condo? If more than $50.00 a night, I was on target. The result? I was able to get my full rent amount, and hit every financial goal. It took more than a great condo to get to this favorable result. It takes effective marketing. I took detailed photos, shot a HOSTED VIDEO of the interior pointing out WHY the client should stay there, and a Facebook fan-page devoted to everything in-between... If your clients can't SEE THE VALUE, they will go somewhere else. In my case, I wanted to show WHY my clients “needed” to pick my unit. I knew that renting ANY UNIT sight unseen was stressful. I would feel the same way. However, if they rented my unit, I knew they wouldn't be disappointed. Every upgrade had been made. I was able to express the advantages of renting my unit, at my desired rent. Less expensive properties can be ideal investments, if you take the time, and hire the right agent. Focus on the TYPE of client you're looking to attract, and imagine yourself as those clients during the process. If you spend a penny, expect 2 back in return. It's an investment, which means it provides a RETURN. Yet Another Example: I spent $400.00 (and of course the time to install) on crown molding. Another $200.00 for 4” baseboards. $3,000.00 stainless steel package. $1,500.00 on 18” tile floors; they look nice and are easy to clean. Important when you're on vacation. $600.00 on a french door. It opened the space, and gave the interior a look that wasn't available elsewhere in the complex. It made my unit unique. Simply, I felt my $1,500.00 a month clients would expect a classy look, so I strove to provide it. Again, if you spend a dollar, that dollar should make you 2 in return. I've been able to rent my condo solid through the winter, and every client has been 100% happy. 2013 is already booked. If you offer a solid value, everyone wins. Buying an investment now, while the market is challenging, is going to pay for itself over time. It's about finding the right property, at the right price, making the right improvements, with the right terms. If you're thinking it's time to look into investing, please give me a call. It takes little time to figure out what your options are, and besides, it's also fun..! |
