Key Messages
The Pros And Cons Of Investing In Real Estate: How To Become A Property-Owning Success
If you’re ready to make your first real-estate investment, then there’s no better way to do it than by plundering a real-estate professional’s warehouse of wisdom.
That’s where Crushing It in Apartments and Commercial Real Estate comes in!
Inside, you’ll find all the insights, experience, and advice gained from a real-estate professional who learned all his lessons in the field.
In this book, you’ll discover why putting your office in the basement can be beneficial if done correctly; why property owners are anything but passive; and how to make your property feel like home for tenants.
You’ll also learn about important things to consider before investing in any property as well as how to avoid some of the common pitfalls of investing in real estate.
It’s time to start investing smarter – so what are you waiting for? Pick up Crushing It in Apartments and Commercial Real Estate today and get ready to profit big!
The Importance Of Knowing Net Operating Income And Cash-On-Cash Returns For Real Estate Investing
Before you invest in real estate, it is essential that you understand the financial concepts involved.
After all, even if a property has the potential to lead to considerable wealth, there’s more to it than just buying an apartment.
The first step is calculating your potential net operating income from the property, by taking into account things like rent paid by tenants, money generated from laundry facilities fees, and pet fees.
Subtracting this income from yearly costs – such as property taxes and maintenance expenses – will result in the net operating income for the property.
The next step is then to calculate the property’s cash-on-cash returns by dividing its net operating income by the amount of money invested initially and then multiplying it by 100%.
The higher this percentage, the better off your investment will be in terms of cash flow returns.
That being said, when looking to expand your portfolio, you should focus on investments with low risk.
Properties which bring in immediate cash Flow are usually less risky so doing these calculations before investing is essential if you want to ensure that your real estate investment will bring in cash.
The Importance Of Bootstrapping And Patience For Real Estate Investors
When making your first real-estate investment, it’s important to watch your spending and keep costs low.
Don’t make the mistake of splurging on luxury purchases like a new car or elegant business cards; instead, stretch your funds as far as possible to maximize income.
Be creative with your resources and use a less-desirable spot such as a utility closet in the basement as your office space.
Even if the fanciest space is available, don’t take it – that’ll take away from the amount you can potentially make from renting out the entire building.
And whatever you do, don’t quit your job just yet!
While it may be tempting to say goodbye to your current work and dedicate yourself entirely to investing in real estate, you’d be taking an unnecessary risk for something which has not been established yet.
As successful investor Murray experienced first-hand, he maintained his teaching job for seven years while he was trying to build up his real estate empire.
It wasn’t until his business started earning $2 million every year that he left his day job with confidence.
Don’T Make Property Investment A Passive Activity: Take Control Of Your Revenues And Be In Charge Of Your Own Success
Commercial property investment isn’t just about buying a property and watching the money come in.
Instead, it should be approached like a business with investors taking on the role of manager.
All too often investors make the mistake of employing outside help to manage their properties, leaving them at risk of reducing their potential profits through financial outlay.
By avoiding this pitfall and taking charge of your investment yourself, you can increase revenues as well as gain greater control over your business decisions.
Review and write leases yourself, broker deals directly and take care of manual labor such as snow removal and landscaping work personally.
Ensuring you are running your business is a critical step to succeeding in commercial real estate investing.
Cutting out middlemen can significantly boost income by decreasing expenditure while also giving you the autonomy to shape your future success on your own terms.
Ultimately, self-management is in every investor’s best interests; it grants greater financial reward whilst instilling confidence that no manager could ever replicate.
The Key To Successful Real-Estate Investing: How To Charge Appropriate Rents And Create A Harmonious Tenant Environment
When real-estate investors want to successfully maximize their profits, they need to make sure they have the right tenants in their buildings.
This means seeking out suitable tenants and setting the rent just slightly lower than is the market rate for an area.
Firstly, charging too much rent can come back to bite you.
Potential tenants may be priced out of renting from you and could look for cheaper space when their lease runs out, leaving your building vacant – something that any investor wants to avoid.
But if you set your rent a bit lower than what’s common in the area, potential renters will be more likely to stay with you as they won’t want to give up the friendly price or high quality of service that your property provides.
As well as being mindful of how much rent you charge, investing some thought into who your tenant should be is essential too.
It’s important that new renters are compatible with the ones already occupying the building – it keeps everyone happy.
For example, having a group of rowdy college students next door to a nest of senior citizens won’t do either party any favors!
Similarly, don’t go putting a marijuana dispensary next door to a toy shop either – one business might profit from such an arrangement but it certainly won’t benefit both businesses equally!
Ultimately, finding like-minded tenants who complement each other will create an environment that functions harmoniously – and this ensures sustainable investments in real estate for years down the line.
Non-Monetary Purposes Can Provide Lasting Motivation For Real Estate Investors
Finding a purpose that is separate from the monetary aspects of real-estate investment is key if you want to succeed in the business.
Sure, money can be a great motivator, but it won’t sustain you for the long haul.
That’s why it’s important to find something else that will.
One way to do this is to take a look in the mirror and ask yourself some thought-provoking questions about why you’re attracted to investing in real estate and what your personal motivation is.
It could be that you genuinely want to help people find comfortable places to live or work, or it might be something entirely different – whatever your purpose may be – make sure it’s something that has substance and meaning behind it.
Once you identify your purpose, it’s important to organize your company values around it.
These values will become integral parts of your company culture and inform how everyone at the company works and behaves.
For example, Natures Nutrition sticks by principles like excellence, creativity and integrity which have proven invaluable during hard times and kept staff driven and motivated even when things haven’t been easy.
Having well-defined values helps keep everyone on track, inspired, and dedicated over time so finding your nonmonetary purpose will definitely pay off!
The Benefits Of Long-Term Investing In Real Estate
If you want to maximize the value of your real estate investments, it is essential that you hold on to them for as long as you can.
The author of Crushing It in Apartments and Commercial Real Estate book knows this, which is why he decided not to sell all of his properties, even though he was tempted.
He recognized the importance of staying in real estate for the long haul if he wanted to create lasting value.
By utilizing a do-it-yourself attitude and making steady improvements to his properties such as installing water reducers or insulating pipes, the author could increase their value over time.
Without this, it would be difficult for him to get a buyer to pay a high price for the property.
Furthermore, by holding onto his properties he was able minimize transaction costs and taxes associated with selling.
It takes time and effort but if you are patient, have the right attitude and a positive vision then it is possible to build lasting wealth through real estate investments.
That’s why when it comes to creating lasting value many successful investors advocate holding onto your properties for as long as possible – because that’s where true financial success lies!
Wrap Up
If you want to tap into the world of real estate wealth, then Crushing It in Apartments and Commercial Real Estate can provide you with all the information you need.
The key message is that you need to treat your investment like a business and not as a passive investment.
Also, try to hold on to your investment for as long as possible.
You should find ways to save money by personally taking care of property-related tasks.
Adding value to your property by rethinking its use is also recommended.
Some ideas include upgrading storage space or turning common areas into rentable spaces.
Finally, converting one type of property into another can also be considered if it laws permit it.
All this advice will be very useful in helping you achieve real estate success!
