How to Get the Best Return on Your Investment


How to Get the Best Return on Your Investment

How to Get the Best Return on Your Investment

Whether you’re a novice investor or a seasoned pro, you’re in the real estate business to make money. You can use many tactics to get the best return on your investment.

First, let’s define what we mean by return on investment (ROI). It’s expressed as a percentage, calculated by dividing your net operating income (NOI) by your cost of investment:

Net Operating Income   =             ROI
Cost of Investment

Keep in mind that the NOI is the revenue you make from the property, minus operating expenses such as maintenance, repairs, insurance, utilities, marketing costs, wages, and property taxes. NOI doesn’t include income tax, depreciation, capital improvements, or mortgage cost—only the costs of actually operating the property.

The cost of your investment is the amount you paid for the property, including financing costs and fees. Do the math, then multiply the result by 100, and you’ll have your ROI expressed as a percentage.

How to Get the Best Return on Your Investment

If you’ve invested in properties in great locations with good amenities and low turnover, you need to make the most of your investment. Here’s how.

  • Market your property wisely. Think like a matchmaker. You want tenants to think your property was made for them. Does your property appeal primarily to young professionals, or is it more for families with kids? Is it convenient to city employers or suburban schools? Consider how the design, location, and amenities might influence who will find your property attractive. If your tenants love it, they’ll stay.
  • Ready, set, show. Is your property move-in ready? Everything should look clean and fresh, and all the appliances should work properly.
  • Control maintenance costs. Regular inspections could save you money in the long run by catching maintenance issues before they become major problems. Line up a roster of professionals who can come out on short notice to keep your property in top condition.
  • Charge the right rent. Have you analyzed the market recently? Charge enough rent—but not too much—and politely but firmly enforce payment deadlines.
  • Talk to your tax advisor. Are you taking advantage of all available tax breaks? A regular checkup with your tax advisor could save you money or find you a tax credit you didn’t know you could get.

Experts are available to help you learn more about how to get the best return on your investment. Excalibur Homes is an Atlanta rental home management company that specializes in assisting clients in buying, selling, leasing, and managing single-family rental homes throughout the Metro area.

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