Strategy in Real Estate Investment
Whether you’re an experienced seasoned investor or a relative newbie to the world of Real Estate investment, it’s imperative to follow basic principles and form a solid strategy before investing and hiring a property management company.
Strategies include how to hold title… example, as an individual, LLC, corporation etc. depending on how many properties you intend to have in your portfolio. A good CPA can help establish these strategies including true rate of return with depreciation and tax planning.
Basic Principles include choosing the right property type, location, price range versus cash flow and school districts. Our strategies are proven and if followed, reduce any potential risk for investors. Our clients are taught a checklist of principles that will generally yield an average of 10% ROI (Return on Investment) depending on equity amount in the property. See our investment tools for Real Estate investors.
Our Property Checklist includes:
- Price range: Stay within a specified price range to include the largest market of potential tenants.
- Location: The old adage of location, location, location is just as important with investment Real Estate to maximize return
- School District: Better school districts mean quicker sales and better returns.
- Home DNA: When we say DNA, we mean age, construction material (which can effect maintenance expenses) functional layout etc.
- Acquisition Cost: Self explanatory term for total investment needed to acquire property (including repairs or upgrades) getting it ready to lease.
- Cash Flow: Does rent expectations justify acquisition costs and create positive cash flow well above expenses and budgeted repairs?
- Resale Value: Probably the most important evaluation is the potential resale value. After all if you’re not going to make money selling the asset… why acquire it?
Once the acquisition is completed, the second half of our job begins…
- Setting up a budgets and overseeing improvements with contractors
- 24/7/365 Response
- Due Diligence on all tenant applications including… credit, criminal, eviction database and employment
- Availability of Emergency Service with our Network of contractors
- Convenient Secured Online Accounting Portal for landlords and tenants 24/7
- All Tenant monies are bank drafted from tenant checking accounts and all landlord payments electronically deposited through ACH
- Quarterly visits and or inspections to ensure property preservation
- Annual Rent Analysis to stay market competitive.
Visit our Charlotte Property Management site for more details