“As a property owner or an investor, there are 2 things you have to keep in mind while owning property.
1. You need to get the best return possible from your property.
2. You also need to maximize the property’s value to allow it to be sold it profit at a future date.
In order to do this you must bring in the most rental income and minimize your outgoing costs.
Investors to keep in mind for Bellewaters
The formula for maximizing your ROI = cost savings + value added.
Here are 7 secrets to maximizing your ROI.
1. Request an early completion of your unit.
You can request a 10-week completion of your sale instead of the normal 12 weeks after you have submitted your cheque with the last payment to your solicitor. In this way, you can get access to the property earlier and rent it out sooner.
2. Start working to improve your property immediately.
Once the seller has turned the property over to you, you have to flip it into rental condition as quickly as possible. This means you must make arrangements to have your renovator examine the property as quickly as possible to be able to start work immediately upon you taking ownership.
However, do not begin renovations until after you have received the keys to the property. This will protect you from liability in case something goes wrong during the renovations or the sale. For some reason doesn’t finalize.
3. Never, finalize and start renovations during festive holidays.
Bellewaters EC in Sengkang Anchorvale Crescent
Make a note of the completion date of the sale and try to avoid any of the major holidays such as Christmas, year-end, and Chinese New Year. It is a certainty that you will be unable to get your renovator to do any useful work or be able to show the property during the holidays. This has a direct effect on your ROI, as the property will remain vacant for a much longer time.
4. Shop around for your renovator.
Get at least 3 bids on the work that needs to be done along with all planned expenditures, legal fees, mortgage, insurance, renovation and repairs. By doing this you get a competitive bid that is often lower by many thousands that if you go with the 1st renovator you talk to.
5. Be on the lookout for cost-cutting measures at all times.
Watch the interest rates closely and when they fall, take action immediately and refinance to get the lower rate. This will save you a lot of money in the long run.
In your rental agreement, you can add a clause that says the tenant must pay for minor repairs of $150 or less. This will save you hundreds of dollars during the coming year for replacing and repairing minor problems.
Make sure you keep in contact with your renters and have them report anything out of the ordinary. Catching a water leak early can save hundreds if not thousands of dollars if left and a major leak occurs causing water damaged walls, ceilings, floors.
6. Raise the rent gradually every year.
If you increase the rent in small amounts, instead of waiting till 3 years and then saddle your tenants with a large increase, which may cause them to move out. This gradually increasing does not seem as threatening and most renters will take it in good graces.
Prior to negotiating a change the rent, Make sure you do something to renovate or upgrade the flat. This justifies in your renters mind the need for a rental hike and again they are more likely to accept it.
If you are renting in the short term of less than a year, make sure your rents are proportionately higher. This encourages the renter to rent by the year, as they perceive they will get a discount and you keep the property from becoming vacant, while you attempt to find another tenant.
Above all else, maintaining professional relationship with your tenants. While it is okay to be friendly never, become personally involved with your renters. This makes things difficult when you are attempting to negotiate a raise in rent or getting them to do minor repairs.
7. Shorten the time the property will remain vacant.
Always keep in contact with your renter and find out what their intentions are with regards to continuing the rental agreement. The sooner you know that a tenant is leaving the sooner you can have another tenant lined up so your property will not remain vacant while you’re waiting for new tenants.
If your renter wants to terminate the contract agreement, he or she should give you sufficient notice to find a replacement tenant. To avoid any loss in rental monies, you can ask the tenant to continue staying and pay a reduced rent on a daily basis until the handover of the flat to a new tenent.