Simply put, forced appreciation is buying something that is not a good investment and making it into one. When looking at an investment opportunity, investors generally follow the same steps. They crunch numbers to decide if something is a good investment and then make an educated decision. Because investors follow these same steps you may find yourself constantly scrambling to keep up with the latest deals. Forced appreciation is quick, less competitive and gives you an increased cash flow and appreciation.
Tips to Increase Your Rental Income
In a single-family investment property, create an extra bedroom if space allows. Tenants are willing to pay more for a 3-bedroom home and a 2 bedroom one, even if the square footage of each ends up being a bit smaller.
Converting an attic or garage to an extra living space is a relatively affordable renovation. A home with extra living space is always attractive to tenants.
Finishing a basement is a great opportunity to increase the living space in a home. This straightforward renovation can even double the square footage of some houses! Finished basements can setup as separate suites giving you two incomes in one property or one higher income for a full house rental.
Renovating or updating suites in a multifamily property is an excellent way to force appreciation. Adding extra amenities always helps too!
In any investment, increasing the income, decreasing the expenses or both can have a large impact on the appreciation of your property. Even the smallest increase or decrease can really add up over time.
To Increase Your Property Value
Add a bathroom to your property. Most tenants and buyers are looking for a home with more than one bathroom.
Homes are valued based on similar properties. Adding an extra bedroom or two if room allows jumps your property to a higher price point.
Remember that first impressions always matter. People rent and buy based on emotions so you want them to fall in love with your property from the minute they step out of the car. Investing in the curb appeal will always pay off.
Multifamily properties are valued based on their income. Living in a multifamily property while updating and renovating it is an excellent way to increase the property value and rental income all at the same time.
No matter your type of investment, the better you operate, the more money you will earn and make when you sell forcing the appreciation of your rental properties.
Appreciation is one of the best ways to create wealth in real estate. Choose the right property, property manager and always make improvements to force the appreciation of your investment properties.