Real estate has emerged as one of the most lucrative investment options. Investment functions on the basic principle of higher the amount put in, higher the risk, higher the returns.
Real Estate is definitely a high-risk, high-amount investment, but keeping a few ground rules in place can ensure a large extent of profit coming back to your pockets.
When it comes to investment, profit and returns, going straight to the point without much delay is always the best option. So here are some simple ways to maximize income from your home.
Buy and Sell Smartly
The heat is felt by the seller and the buyer alike when a large amount of your hard earned money is doled out in form of commissions to real estate agents. A couple of years back, maybe this was the best way to get the best deal for your house. But now with so many online portals assisting you in getting a good deal for your home and reliable websites coming up, helping you buy property online smartly, the middleman costs or agent commission can be done away with. All that needed is a little effort.
Do your research well. Talk to property owners who have bought and sold property online without estate agents. Ask about their experience. Take tips from them. You can even initiate discussions in real estate blogs about the exact information regarding your property. Kitchen improvements, neighborhood suggestions, flooring, ongoing market prices, there is an ocean of information waiting to help you. So chuck the agent, do your research and buy and sell smartly to get the maximum benefit from your property.
Excessive Home Improvements will not Reap Benefits
A common mistake made by many home owners who intend to sell their property in the long run is to overspend in unnecessary home improvements. A luxurious swimming pool in your house is not going to get you great returns when you decide to sell and you should hardly be surprised. How many families with kids do you think would want to have a house where little toddlers could fall and drown into the water? Add to that the regular maintenance costs and your additional facility that you spend thousands of dollars on will reap you zero benefits in 9 out of 10 cases. Another upgrade that is gradually becoming obsolete is also wall-to-wall carpeting in middle-range homes. Most people now prefer the regular wooden flooring as that requires less maintenance and also prevents the attack of allergens.
Similarly staged furniture will only add to your costs, not to your profits. Instead de-clutter your home, keep it neat and nicely lit. Along with good photographs that will get you enough interested buyers.
Another rule of thumb -- do not spend excessive amount in services that won't be even visible to a prospective buyer. The fact that you have installed the best heating and cooling systems in the house or have kept a fabulously diverse flora and fauna variety in your backyard will not fetch you any additional income though you must have incurred much additional expenses for it.
Fix All the Negatives in the House
In continuity with the previous point, which emphasizes not spending on unrealistic and excessive home improvements, this point tells you how some home improvements are absolutely necessary to escalate the value of your house and give you maximum returns.
The door knobs, the water supply, the bills, clean floors and walls, proper drainage facilities can be make-or-break factors in selling of a home. So spending on these quality and necessary facilities are a good option to maximize your returns on the sale of the house. After all, nobody wants to go into a house where you have the hassles of water, moth-eaten wall corners, or unpaid bills.
However, an eat-in kitchen or creation of extra space in some way are quality renovation ideas that will give you an upper edge as a seller and bring you some good profits. The trick in real estate just like most other things in life is to know where to spend and where to save.
Invest in Boring but Reliable Properties
Be clear in your head about the purpose of purchase of the property right from the start. If it is to make a good investment option and seek returns then pick properties that do not require a lot of your time and effort in managing it. Vacation houses, properties in bad areas, and college rentals are definitely adventurous and interesting choices but they will not get you adequate returns and will take up an immense amount of your time and efforts.
On the other hand, a safe boring property in a middle-range neighborhood in good condition is a constant source of income from decent credit profile tenants and hardly requires any managing.
They also sell quick and at good prices even in a buyer's market. So invest in boring but reliable properties.
Income through Rent
Renting your house assures a constant flow of income for you. Besides, there are several rental opportunities that can fetch you a higher than usual income. When you have a big house to rent say a duplex or triplex, different floors or rooms of the house can be given in rent to separate entities, and that will fetch you a higher rent than just renting it out to one family.
Similarly, when you rent to a business firm, the rents are generally higher and for longer tenures. They are also safer than residential renting. Besides there will be various tax benefits renting entitles you to, which also become a form of saving and income.
Also being on good terms with your tenants is a good idea to minimize hassles and keep the income flowing.
These are just a few ways income can be maximized from your real estate investment. You can always read up and research more to find out other lucrative ways to do so. Just be cautious about keeping it it fair and legal.