With these main factors at the core of sustaining your profitability, it’s also critical to know exactly what types of renovations will make (or break) your rental gains. Let’s jump in.
The desire for more space, rising prices and lack of inventory make for the perfect storm for suburban and urban housing.
The rental market is primed for investment opportunities, and now is the time.
INCREASING YOUR RENTAL ROI Unlike improvements you would make in a primary residence or a fix-and-flip, the best rental property renovations will increase rent and your bottom line by attracting top tenants without over- improving it. Here are the top 8 improvements we found to be most profitable:
PIVOTING TO PROFIT Whether you’re new to the rental property world, or a seasoned vet, you can expect the strategy to yield slow but steady returns. The beauty of renting out the houses that you renovate is that once the renovations are complete, the time comes to sit back and collect passive income. The rewards of this approach come hand-in-hand with the flexibility to pivot with the market. For real estate investors who have been in the fix-and-flip lane, this can be the perfect opportunity to diversify strategies for longer-term gains. Especially in light of market shifts that make it extremely difficult to acquire properties for fix-and-flip, this pivot poises real estate investors for success. If you choose to renovate an existing rental property, or if you decide to acquire a new property altogether, here are some important factors to keep in mind when it comes to overall profitability: FINANCING: With conventional rates on the rise, as compared to 2021, there are other financing options worthwhile to explore. Private money loans, for example, are available in the form of long-term rental loan products that can be the unsung heroes to your portfolio’s success. Investors forego stringent qualifying criteria and close their loans much quicker. Added bonus: If you have multiple investment properties you can use the combined equity to purchase additional ones more easily, or you can refinance your entire portfolio. Lenders such as CIVIC Financial Services also offer Rehab Financing, helping investors to stay liquid until renovations are complete. INTO THE GREEN: When you bundle financing, property management fees, and everything in between, the ultimate goal is for your profits to exceed your expenses. While the path is undoubtedly slower than the instant gratification of a flip, keeping your eye on this prize means making your way to living entirely on passive income. REFINANCE AND RECAPITALIZE: When holding properties as rentals, the property value traditionally goes up with home appreciation. Tap into and pull cash out on the established equity and use those funds to acquire additional rental properties, fund property renovations or use towards other business purpose expenses. TAX BREAKS: You can look forward to getting some tax breaks by deducting expenses related to maintaining and operating your property, so be sure to consult with a tax specialist familiar with rental properties. What’s even better? You’ll avoid having to pay heavy capital gains taxes as you ordinarily would when you flip a property.
1. Upgraded faucets and sinks throughout 2. Fresh, neutral-colored paint 3. New appliances, including washer/dryer in-unit 4. Quality carpet in living room/bedrooms 5. Laminate flooring in kitchen & bathrooms
6. Durable and beautiful countertops 7. Increased storage and shelving 8. Upgraded windows
Just like surfing, investing in real estate isn’t for everyone. But for those who are ready to jump in, this is one ride that can quite literally take you comfortably into the sunset of your life.
CIVIC Financial Services, LLC is a leading institutional private money lender specializing in financing non-owner-occupied investment properties. CIVIC helps investors leverage opportunities to grow their real estate portfolios and build wealth through real estate. For more information, please visit www.civicfs.com.
OUR MONEY’S ON YOU®
www.civicfs.com/ThinkRealty
©2022 CIVIC Financial Services, LLC. All Rights Reserved. This is not a commitment to lend. All offers of credit are subject to approval. Restrictions may apply. CIVIC Financial Services, LLC reserves the right to amend rates and guidelines. NMLS ID 1099109. Loans made or arranged pursuant to a California Finance Lenders Law License 603L321. AZ Mortgage Broker License 0928633. OR Mortgage Lending License ML-5282. See www.civicfs.com/Licensing.
Made with FlippingBook Online newsletter