INCREASE YOUR PROPERTY'S VALUE

By: Mark Frentz
www.akerahomes.com
mfrentz@akerahomes.com

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Any Idiot

My apologies in advance if this comes across as rude... I don't mean it that way. Any person, regardless of their understanding of real estate or investing, can make money in an up trending market. Every person who purchased a property in Calgary in 2004 and sold in early 2007 made a ton of money even if they overpaid on the purchase price and got way less money than the property was worth when they sold (they could have even destroyed the property while they lived there and would have made a bunch of money or had tenants that didn't pay rent for half the time). It is extremely easy to make money in real estate when your property value increases, without any help from you, by over 35% each year! What every serious, long term investor really wants to know is how to make money in ANY MARKET. If you belong to this latter group keep reading.

Five Tried and True Tips

1. The first tip I will always mention to increase value is to underpay, or at the very least not to overpay for the property when you purchase it. I know a lot of people who overpay for their property. Here's a tip... find a local wholesaler of real estate (through your local investment clubs) and get a deal on the property. When you do this you aren't necessarily increasing the value of the property, but you are automatically increasing the amount of equity in your property which is basically the same thing.

2. When upgrading the interior, focus on only the most important features. a) paint the walls b) redo the flooring with laminate c) if the kitchen needs upgrading put in an inexpensive set from Ikea d) if your property is older and only has 1 bathroom, put another one in that is simple and functional (no granite counters!). All of these ideas give you the most bang for your buck. If any of these areas doesn't need upgrading... DON'T. The general rule is don't spend money on something that doesn't help your bottom line even you really like it. What you like isn't important when selling or renting out a property. What a majority of other people like is important.

3. Turn a bonus room into a bedroom by, again, purchasing a relatively inexpensive Idea set. When potential buyers AND potential tenants are looking at a 3 bedroom house rather than a 2 bedroom house, they expect to pay more for it.

4. If it is an older investment property that you are keeping for yourself think about suiting the property (this depends on the type of property you own; bungalows typically work best because it is easier to do and costs less)

5. Put in a garage. In Calgary this can cost around 15-20k, which is expensive. If you are paying 4% interest on borrowed money to put in a 20k garage your payments will be $800 each year. If you put in a double garage in the backyard you can now (I'll underestimate) charge at least $125 per side each month. This means you will end up making $3,000 each year in garage rental or $2,200 after the interest payments. You've increase the value of your property AND increased the amount you make every year on that property. You could put the other $2,200 against the borrowed money and after 9 years you would be simply putting the $3,000 into your pocket each month.

Why Add Value?

There are four reasons I can easily think of to add value to your property:
1. People will pay more for the property when you sell it
2. People will pay more to rent the property
3. You will attract better tenants if the property looks and feels better. These tenants will often be easier to communicate with on many levels if you are doing your job of managing the property properly
4. You can refinance your property for more money and put that money toward another property sooner

Last Words

Getting more value out of your property is not difficult, but it is very worthwhile if you want to retire and reach some of your dreams in life. The key to real estate is treating it like a business. In my opinion the vast majority of people who own investment property do not treat it like a business. If you are the one who is different and makes more money in the business you will stand out as someone different and become far more successful than the average investor. What is one way you can make a larger difference to both yourself and your community by treating your nest egg like a business this month?




Here's to your future of risk-averse investing!

If you would like to learn more about investing in real estate please contact me at the email address listed at the beginning of this article or go to my website at: www.akerahomes.com/investing-in-real-estate.html