In order to increase your rental profit, you have to be a great landlord. While having great tenant plays a major role in your rental profit, there are things that you, as a landlord, can do too. With a great tenant and a great plan you can get a lot out of your rental properties. Today I’m going to cover four different ways you can start decreasing your outgo and increasing your income to increase your rental profit! Decrease Vacancy Vacancy is the number one killer of profit on rental properties. Every day that you don’t have a tenant in your rental you are losing money. Decreasing your vacancy is the fastest way to increase your rental profit. There are two easy ways to see this through. Decrease your vacancy by rehabbing your rentals the right way. Just like when flipping and selling a house, always have the best house on the market. Take the extra time to make sure that your house has all of the features included in other houses in the same market, and then add a few more. Whether it is extra tiling or central air, take the time to set your house apart from the competition. Customer service is something that is valued very highly in today’s society. As a landlord, make yourself as available as possible for your tenants. If you can’t be as available as you want, have a plan in place to provide your tenants with above and beyond customer service. Consider hiring a property manager or having a repair crew contact list available for your tenants. Increase Turnover Speed As a landlord, you have to look at the status of your properties on a day to day basis. Tenants come and go. It’s the reality of being a landlord. Your ability to quickly increase your turnover speed can greatly increase your rental profit by eliminating vacancy. The minute you have a tenant move out of your property, you need to have a rehab plan in place. Walk your property a week in advance of your tenants leaving. This will give you more than enough time to get your rehab team in place and get your house rent ready in the following days. Start your marketing early. The earlier you can get exposure to your rental property the faster you can start screening tenants. Put out ads that have the date that the rental will be available. The goal is to have a new tenant ready to move in by the time your rental rehab is done. Always Charge Late Fees Never wave late fees. This is especially important when you first begin renting to a new tenant. If you wave a late fee one time, chances are it’ll be expected of you the next time the rent is late. You literally cannot afford to...
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There is a common misconception among new real estate investors and people looking to get into real estate investing that all flips are the same. The truth is that there are many factors that go into deciding what type of flip an investment property will be. In today’s post I’m going to discuss the five different types of flips and what sets them apart from one another. Minor Cosmetic Flip These types of flips were created by the bubble and were popular between 2009 and 2012. Typically a minor cosmetic flip can be completed for between 10-12 thousand dollars in repairs. Some repairs you might find in these types of flips are new carpet, new paint and minor sheetrock repairs. Performing these types of repairs is often called “lipsticking” a property because you are working with and improving most of the original materials. Now while these were popular a couple of years ago, they are few and far between now. It takes more resources to rehab a property now that it did back then. You’re far more likely to find a major cosmetic flip now than a minor cosmetic flip. Major Cosmetic Flip This is a scaled up version of a minor cosmetic flip. I’ve done over 300 of these types of flips. Actually, just today I put three of these types of properties under contract! These are usually houses that haven’t been updated and require more than just “lipsticking”. These aren’t gut jobs. When working with these types of flips you will still be using a lot of the original materials but you will be required to do some updating. New kitchens, bathrooms, flooring and roofing work are almost always a must. You’ll also want to make sure that your EMPs (Electrical, Mechanical, Plumbing) are all up to code. I typically set aside 30-40 thousand dollars for repairs and updating on these types of properties. One of the main points that separate this from a gut job is that, like the minor cosmetic flips, you are working with existing materials inside of the property. Gut Job Flip Typically these types of flips are performed when an investment property has a weird layout. I’ve probably done around 50 of these and most of them had some kind of a layout issue that needed work. Normally I start with walls and build in from there, ripping out the insides and leaving only the “shell” of the house. Gut jobs normally take longer than the previous types of flips due to a couple of factors. Permits for construction on the house take a while to get and there are multiple levels of permits to get. There are also multiple inspections that need to be done. Add On Flip These types of flips happen anytime you add square footage to a house. This could be adding...
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Running a house flip is no easy task. It takes a patient person with the right resources in order to run a successful house flipping company. As a new real estate investor you need to look at your business one day at a time. You need to have a plan in place. In this article I’m going to cover three things that you need to have in place for every house flip in order to be successful. Funding Always have your funding in place before you start a house flip. Part of having a successful business plan is to have funding in place before you ever get a deal. There are a few different ways that you can make this happen. Hard money lenders are a great source of funding. Many real estate investors who are beginning their first house flip use one or more hard money lenders to get their careers off the ground. Search for harm money lenders in your local area and start by getting pre-approved. Private lenders are another awesome way to fund a house flip. These are normally family and friends who have money to lose. Never ask somebody for money who will miss it when it’s gone. Beginning a house flip project takes a lot of risk. Always let the people you are borrowing money from know that. Banks are another institution that will lend money to a house flip project. These are typically longer term loans and harder to get a hold of, but another viable way to get money for a house flipping project. A Team Before you take on a big project like a house flip, you need to have a team in place. You need to have your starters, your backups, and your backup’s backups. You need to have multiple people who can do the same jobs in case you end up with multiple properties. In order to do this you need to start networking. Signing up for a Bigger Pockets account is a great way to get advice on what to do with your house flip. It’s also a great way to find local investors, contractors and realtors. Another way for you to build your network is through a local REIA. Joining a local REIA gives you access to people who are getting real results with real tactics. These are the best people to ask about hiring team members to help with a house flip. Once you figure out who you need, start building a contact list. Call contractors, plumbers and electricians and introduce yourself. Let them know who you are and what business you’re in and that you may need help with a house flip in the future. Once you get a deal, you’ll already have a list of contacts to call and start getting bids. Have a Business Plan You don’t...
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One of the fastest ways to build a fortune in real estate is by flipping houses! I have spent the last decade flipping houses and have been very successful at it. Once you start flipping houses, the sky’s the limit! So what are you waiting for? Study my educational video library and start investing today! A seasoned investor with over 10 years in the industry, Andrew is a nationally recognized speaker and educator. His passion is helping people find their purpose and in 2013, he celebrated a groundbreaking strategic alliance with Home Depot, Inc. Andrew has flipped hundreds of homes in multiple states and tours the country sharing his vast wealth of knowledge with investors of all experience levels. Andrew loves to teach new investors how to flip a house and mentors a small, select group of student investors who have had great success applying his proven systems. Click here to watch the video! ...
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