Have you started investing your money into Detroit real estate? If so, you might be curious about how to maximize your returns to see the highest profits possible. Even the savviest and most experienced investor can learn new ways to capitalize on their investments. Keep reading to learn how to maximize your real estate returns in Detroit!
Set Your Standards
If you own a rental property, you should be seeing returns of at least 6-8%. Many properties see amounts higher than 10% annually. Know how much you expect to make going in and go from there. This will help you choose the right property for your budget and expectations.
You should consider your long-term goals and not just what might seem like a hot deal at the moment. What is your investment style? Do you want to be involved with the property or more hands off? You should invest in properties you are comfortable with and that you have the time and resources to maintain. Do you really want to be a landlord, or would you rather flip? Don’t want to do anything? Maybe consider a REIT.
Make investment decisions that are right for you. Don’t attempt to simply copy someone else’s strategy and expect it to work the exact same way for you.
Keep Your Options Open
A savvy investor is open to change and is comfortable altering their plans as the market fluctuates. You should always be ready to sell on a dime. Don’t find yourself in a place where you are too attached to a property or too comfortable to sell it when you need to.
If you are buying a Detroit house to flip, be ready in case it doesn’t sell in the timeframe you need it to. Be prepared to get tenants in there to help cover your mortgage and other ownership costs. Letting your property sit empty on the MLS will only end up costing you.
Before you buy a house, have your exit strategy in place. You will want the option to liquidate the house in case the returns aren’t there or a better property comes along. You don’t want to be so tied up in a property that you let a good deal pass you by.
Finding The Right Tenants
When renting a property out, it is crucial to have the right tenants in place. Screen tenants just as a professional would, in fact, many times it pays to have a third party company help you in this step. Just like a company loses money with employee turnover, you will lose money if you are continuously having to find new tenants for the home.
You should have a professionally written lease in place, with all of the expectations clearly outlined. It tenant needs to mow the lawn, put it in the lease that they are responsible to maintain the landscaping, keeping it in the same condition as it is on the move-in date. The property should be kept clean and treated with respect by your tenants.
On the flip side, it will pay off to create the property that people want to live in. By creating demand for your home, you will encourage other local landlords to up their game. Upgrade and create a nice living environment for your tenants. This will encourage the long-term tenancy you are looking for. Having high vacancy rates will cost you a fortune in lost income.
Finding The Right Team
Great investors get that way by having the strongest and most dependable teams around them. Build connections with the areas top property managers, repair companies, agents and professional property buyers! Get to know other investors who you can possibly partner and share leads with. By having knowledgeable and experienced people on your side, you will be able to become very successful in Detroit real estate investment!