Being a real estate investor means that you expect to get a nice income from the building that you own. Usually, investors choose to buy apartment complexes, as these are requested on the real estate market today. Even if houses are also on the table, the apartments are easier to manage, as they are part of an entire building, making the managing job easier.
However, when you decide to get such a building, you expect to get a good profit after you have paid everything that needs to be paid. The profit comes from the rent that you ask for each apartment, and it should cover all the expenses with mortgage – if there is one, property management, the utility bills, the repairs and so on.
Usually, people are looking for a nice, cozy place. If you want to make sure that people will come and ask for your apartments, you really have to change the way the building looks like. If you have bought it, there is a reason why the former owner has sold it, and usually that reason is the lack of profit.
Now, wondering why is easy, but answering is even easier. If people can’t find what they are looking for in that place, they will definitely be looking for the same thing somewhere else. It’s easy and it’s actually what people usually do – look for better places to live in.
What You Can Do
First of all, you’ll need to make sure that the place is fit for living. You can check out each apartment and make a list with what it needs. The entire building might need a new HVAC system or new AC units, so see what you can do. You’ll have to make sure that there is a constant water supply and that every system works. This is the only way in which you’ll be able to ask for a higher rent and increase your profit.
Look at the walls and on the floors, but also look for the existing appliances. You can add a laundry room in the basement or on each floor, if the apartments don’t have washing machines.
What to Change
When you think about changes, mix the home improvement projects with interior design projects. Home improvement is what was presented earlier, along with insulation for the building, new windows for the apartments, new doors and so on. The interior design is about renovating everything – changing the colors, adding newer furniture or improving the one that is there already, adding art items – if possible, and so on.
This might seem like a big investment, but just think what kind of apartment would you choose for yourself to live in – one that has no water supply, or one that looks newly painted and has carpets on clean floors.
It’s expected to make secondary investments after you have bought a big real estate property, but with just a few projects for increasing the value of your property, you’ll be able to have more happy tenants, and in the end, it will be all worth it.