The property market is a great way to make a considerable profit if you know how to manage property and the best ways to get the most value out of them. Many investors get into the market with the false assumption that this is a fool-proof way to turn a profit and that all you need to do is make the initial investment. This is an unwise way to proceed in my experience, and investors will see a much greater return if they take up the endeavour with skill and effort.
The great thing about investing in homes is that it’s a flexible approach to generating income: you can resell the property to make gains on the increase in the price, or you can garner a regular income as a rental manager. There are a number of ways you can become a successful investor, and in this article I’ve highlighted five of the most effective and potentially fruitful approaches based on years of experience.
Rental Market Investment
Perhaps the most fruitful of the investment opportunities is that of the rental landlord. Taking a home in a desirable area and charging rent to good tenants is an artform that takes a lot of careful consideration. With so many pitfalls when working with tenants it’s wise to engage the help of expert property managers.
When you do have a situation that suits the rental market you can be onto a good, regular income over the lifetime of the tenancy. There are a number of things to take into account with this type of investment, however, not least the location and desirability of the property. It’s no good buying a dilapidated property in a low-desire area as you’ll struggle to find tenants to take it – making smart decisions early on is key for rental investments.
By ‘flipping’ what we mean is to purchase properties – preferably one that needs a bit of work – for a good price, and then carrying out repairs and improvements to raise the market value of the property. These quick turnarounds can be very fruitful in the right market conditions – buying a property for $X, carrying out $Y worth of work and then selling for more than X and Y combined is a truly great achievement and something that can rapidly turn into a profitably business.
It might seem a bit out of place on this list, but your tax liabilities on investment properties are something that can be a great source of cost reduction. Talk to your account or expert property management companies about the best way to reduce this tax burden and you’ll soon see your rental or capital gains income increasing!
Growing the Value
Growing the value of a home over a long term is a great way to ensure a steady increase without the rapid turnaround of flipping. It means you can take a home that you’ve owned for years and see a good return on it. This is great for people who are looking to make long-term investments – and properties purchased with capital growth in mind can even be rental properties first while the land value slowly increases.
A good technique here is to seriously research areas – like those in Rochester, NY that are likely to increase in value in the coming decade and make a purchase there while the prices are low.
This is perhaps the most complex of the property investment opportunities, but if done right then can easily be the most profitable. It’s perfectly possible to develop properties from the ground up – building from scratch can be the cheapest way to generate an income but does require a fair amount of start-up cash.
Land can be much cheaper when there are no houses on it and the smart investor – or one who is backed up by experts – can then take the necessary steps to build quality, desirable homes for a lower price than they can then be sold for. As you might expect, this approach comes with sizable risk, so it isn’t something that just anybody should undertake, but if you’re looking to start a business out of your investment budget then this might be something that you’d want to think about.
How Can We Help?
At Torres Turn Key we are experienced in many aspects of property management and can help you make the most of your newly acquired property in Rochester NY. It’s a great place to get into the housing market and we’ve got a wealth of experience helping our clients get the most out of this attractive and vibrant city. Plenty of people want to live here, which means that your investment has every chance to be a good one – why not get in touch with us to see how we can help make that a reality?
As you can now see, there are multiple different approaches to investing in the housing market here in Rochester, and each of them will have benefits and negatives depending on your desires and circumstances. Whether you’re a first time investor or you have an expanding portfolio, our expert team can help you get the most out of your property and can provide helpful and friendly advice about the best way to proceed. Drop us a line today to see what we can do for you.