The Super Ultimate Profit Making Real Estate Strategy!

What I am going to tell you below is by far the most effective way to generate consistent long term profits in real estate. There are a lot of “systems” out there. Yes, some of them do actually work, but the vast majority of them are smoke and mirrors – at least the profits they claim you will make are. I am sure you have seen those 2am infomercial claiming you can by houses at pennies on the dollar. There are phenomenal deals to be had out there, but they are few and far between and there are a lot of investors going after those “amazing” deals. So forget the systems, leave the hype behind. Instead focus on reality. There is one and only one way for the average person to generate consistent and safe profits in real estate. This method is not effected by economic ups and downs or variations in the real estate market. It is tried and true and does not require you to purchase a fly-by-night system to take advantage of it.

The trick of this method is to purchase houses that are suitable for both selling and renting. That means the primary concern of this system is the mortgage payment. If the mortgage is too high the rent you collect each month will not cover it. The goal of this system is to put you in the green (profitability) as soon as possible. So forget about purchasing mansions. Forget about purchasing property in the nicest, trendiest part of your city. For the most part, although there are exceptions, the nicest part of the city attracts real estate buyers far more often than it does renters. By nicest I mean the area where home prices tend to be the highest. When you think about your city ask yourself where the trendy people want to live – that’s the area you want to avoid. Instead of trendy think family friendly, clean and safe. That is the type of area where you (ideally) want to purchase your properties.

The property you are looking for should require numerous and relatively inexpensive fixes. Good things to keep an eye out for are houses that need to have the yards landscaped and a fresh coat of paint put on to maximize curb appeal. Houses that need cosmetic fixes are wonderful because these types of fixes are typically low cost but can substantially increase the equity in the house. Additionally, houses that look run down attract renters with less money to spend, while houses that look nice inside and out attract renters with more money to spend. Remember fixing up a house isn’t just about creating instant equity in the house; it is also about attracting a “higher-class” of renter. That is, renters who take pride in how the property looks. This is important because you can generally trust these renters to take care of the property instead of running it into the ground which could save you several thousand dollars in repair costs after those renters move out.

For a good “fix-up” real estate investment system to work you should always be looking for fixes that maximize your monthly rental asking price and present the largest increase in equity. Think of it as killing two birds with one stone. You purchase a house for $150,000 and spend 1 month doing fixes that equal a $25,000+ increase in the value of the property. At the same time you turned the house into a $1,000 per month rental unit instead of an $850 per month rental unit. This means that in a good sellers market you can sell the house for a substantial profit. Conversely in a poor sellers market you can rent the house at a high rental fee to create a long term income stream, either way you win.

There are also some expensive fixes that are good to consider for older homes. If your house has energy inefficient windows and doors you should consider replacing them. Making this kind of fix will often lead to large increases in the home’s value. If the house is also a rental this kind of fix can also increase your monthly rental fee by $25 - $75 depending on how much it will reduce the tenant’s utility costs. For example let’s say the tenant’s utility cost is $150 per month and the rental price is $800 per month. The tenant is paying approximately $950 per month. If you installed energy efficient windows in the home which save the tenant $50 per month on their utility bill you could raise your rental price to $825 and make the tenant happy because the utility cost is now only $100 bringing their total monthly cost down to $925 per month, a $25 savings. This is a true win-win situation.

Keep these tips in mind when you are out looking for your next investment. You will find that a simple fix up strategy is one of the most effective and safest methods to bring you solid long term profits in real estate.