Three Hidden Ways to Boost Profitability of Investment Properties
There are many ways to improve the value of commercial properties, but some methods are better-known than others. If you’ve already implemented my more standard approaches to increasing property value and are looking to try some additional tactics, check out these lesser-known methods and start increasing the profitability of your investment today.
- Improve the curb appeal of your property. First impressions aren’t everything, but making a good one can sure go a long way. When it comes to real estate, the initial reaction of the potential buyer or tenant to the exterior of a property can often play a central role in shaping the decision-making process. If the property grounds have not been cared for properly, the potential buyer or tenant may become apprehensive before ever setting foot inside the property. Eliminate this by ensuring that standard maintenance work like landscaping, trash collection, and general cleaning have all been completed prior to a buyer visit. A well-maintained exterior automatically creates value in the mind of the buyer or tenant, allowing you to increase the profitability of a property.
- Minimize your liabilities. When a landlord signs a lease with a new tenant, the initial response is often a feeling of accomplishment. If you aren’t familiar with any liabilities hidden in your lease however, this sense of satisfaction will probably be short-lived. For instance, some leases allow renters the right to terminate a contract without paying the property owner a fee for breaking the agreement, while others may give a tenant an exclusive use without paying the landlord for that exclusivity in some fashion. The value of the property will depend in large part on the value of the lease that encumbers it. If the lease creates too much risk (or liability) for you as the owner, negotiate changes to the document with the interested parties. One of the best ways to increase the profitability of an investment is to negotiate a fair, market value lease with no surprises.
- Don’t defer maintenance. Smaller problems like minor roof leaks or water stains can often lead to bigger, harder to repair damages if not attended to immediately. Repairs like these can end up costing you more in the long run if not dealt with when the issue first emerged, reducing the profitability of your investment. Additionally, when looking to purchase a property previously owned by someone else, take into consideration any maintenance deferred by the previous owner. These repairs will be additional expenses you’ll incur after your purchase, ultimately increasing the amount you’ll invest in the property.