Many business and sales professionals subject themselves at the end of the year to an analysis that, when completed honestly, tells them where their strengths and weaknesses lie in relation to their job performance.
The analysis affords an opportunity to focus in the coming year on those areas that need the most improvement and, in turn, increase performance.
What about a strengths and weaknesses analysis for your real estate investments? If there were such a program, it would probably look like this:
Income analysis. What was your net operating income from each property you own for the latest fiscal year? For each property owned, are your rents at market rates? Are most of the operating expenses of the property paid by your tenants? Where could the lease on this property be improved to increase operating income? Are there ways to improve the property that will result in higher rents or lower utility or maintenance bills? What methods do you plan to employ to increase income in the coming year?
The local market analysis. Will 2020 bring higher lease rates than 2019? Are employment numbers improving? Is there a net migration into the Grand Valley? What’s happening with employers? Is the trend positive for leasing real estate? Should you make strategic improvements to the property to ready it for a sale? Based on the outlook for the coming year, what’s the best strategy for the real estate you own?
Now, consider whether or not the following attributes constitute strengths or weaknesses for every property you own.
Ease of management.
Appearance — the attractiveness of the property to potential tenants.
Your ability or inability to manage the property
The longevity of the exterior and interior finishes, HVAC systems, landscaping and water systems, parking lot and roof.
Perhaps I should headline this column “How to grow your income in investment real estate.” Ultimately, what matters is you or your professional property manager pay attention to your investment to help advance your financial future.