Investing in real estate can be a significant investment, possibly the largest investment one would make in a single transaction. Considering it's such a large financial commitment, it's only natural that receiving a return is just as if not more important.
Understanding the types of returns is just as important as well, especially for rental properties. Take care not to mix up Cash on Cash returns (COC) with the Return on Investment (ROI). The two focus on a return on the initial investment, but essentially play their part.
One way to understand the difference, and set and track goals altogether in maximizing and tracking investment goals is by partnering with a property management company that specializes in such.
Outside of the obvious, more profit, there are a few reasons that support why increased profits are key to maximizing your real estate portfolio.
Wealth Builder: It goes without saying: Historically, real estate investment has been linked to substantial wealth building. It's regarded as one of the most profitable businesses. Maximizing your return increases long-term wealth.
Steady Passive Income: Creating long-term wealth is the key to creating a financial security blanket for your future family. Steady passive income is the key to affording present-day financial freedom.
Get Rid of Mortgage and Other Debt: Increased profits as a result of maximizing your returns assist in ridding yourself of associated debt.
Higher investment returns are positive in real estate investments, and in addition to the above, it affords stability through downtimes, also known as making an investor inflation-proof. It also provides a way to continue portfolio growth by allowing the investor to reinvest in the market and continue a growing earning cycle. Overall, it allows an investor to achieve their financial goals.
By working with a property management company, you can ensure that your investment property is well-maintained, rented to quality tenants, and generating the highest possible return on your investment.
The timeline for real estate investors to see a return on their investment can vary depending on several factors, including the type of investment, location, market conditions, and the investor's goals. While some investors may see returns rather quickly, in a few months, others may see a return a little further down the timeline.
The best examples would be: rental properties vs. fix and flip. Rental properties can potentially establish cash flow within 30 days of becoming occupied by a tenant. Whereas, a fix-and-flip property typically wouldn't experience a return until after all renovations have been completed and the property has been placed on the market and sold.
In addition, real estate investments may generate returns in different ways, including rental income, capital gains, and tax benefits. Some investors may prioritize long-term, steady income from rental properties, while others may focus on short-term profits from flipping properties or investing in high-growth markets. It all comes down to working with the specified goals of the investor.
Working with a property management company can help establish those goals, and set up a strategy, backed by their expertise to achieve those goals. But, there are more advantages as well including saving time, and increasing efforts. Real Estate investment is most successful when it involves team effort. Leveraging the efforts and expertise of a qualified property management team who can handle operations will help secure a solid foundation for a real estate investment portfolio.
Increase Tenant Quality: Proper tenant screening means better tenant quality, on-time rental payments, and property preservation.
Property Preservation: Maintenance is the biggest tenant concern. Hiring a property management company that can secure quality maintenance will not only help with property appreciation, it will also increase tenant retention.
Other ways that a property management company can help maximize your return are by providing necessary legal protection through managing property compliance tasks and providing financial transparency at a glance by keeping accurate financial reports.
Overall, the timeline for real estate investors to see a return on their investment depends on several factors and can vary significantly.
Investors need to have a clear understanding of their goals, as well as the market and investment risks, before making any investment decisions.
National Real Estate Management Group understands the importance of maximizing returns, which is why we go the extra step. We offer a partnership from the acquisition table and beyond. We provide full-service support in establishing investment goals, providing our clients with market insights that will assist in making the most advantageous investment according to their goals and financial situation. We also provide continued support through top-tier property management services focused on property appreciation and maximum return.
Are you looking to capitalize on your returns? Schedule a call with us today and let's discuss a game plan customized to your real estate investment goals.