Sell Your Income Property For More

Selling income property isn't like selling a house. You can paint a house, and get a little more because it looks nice. Rental property is different, because it's bought by investors, who look at income more than new paint. Raise income, and you increase value.

Let's assume investors in your area expect a capitalization rate of .08. That means that they want a net return (before loan payments and taxes) of 8% on the purchase price. If your three-plex generates $12,000 net income annually, they'll value it around $150,000 ($12,000 divided by .08). Make it generate $16,000, and you make it worth $200,000.

Get More Income From Your Income Property

Higher rents is the obvious way to boost income, if you can justify it. Find out what similar units are renting for. If you're $60 below the going rate, you can raise rents and not lose your renters. Raising the rent $60 for three apartments means $2160 more net income annually. At a .08 cap rate, you just added $27,000 to the value of your property.

Consider other ways to raise rents. Your tenants may agree to $30 more per month if you have a carport built. That's $1080 more net income annually, meaning roughly $13,500 more value added to your property. ($30 x 3 units x 12 months = $1080 divided by a .08 cap rate = $13,500) Build that carport for $4,000, and that's a good return on investment right? What else do they want?

Consider other ways to get more income. Rent storage sheds to tenants or put in a coin-operated washer and dryer. If you own a larger income property, you could install pop machines.

Reduce Rental Property Expenses

Can you add insulation to reduce the heating costs? If you're paying $80/month for lawn care, will one of the tenants do it for $40? Can you get cheaper insurance? Look for any ways you can reduce expenses. A new $4,000 furnace that saves $800/year on heating costs means you just turned $4,000 into a $10,000 higher sales price.

These things are never an exact science, and of course appearance and other factors matter. Increasing that net, though, is the surest way to get more for your income property. Just make the changes at least several months before you try to sell the property. Also, learn how do the math - it really does matter.

Steve Gillman has invested real estate for years. To learn more, and to see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com

MORE RESOURCES:

Fidelity sheds portion of real estate investment group - Bizjournals.com

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/0-0fd=Rurl=http://www.bizjournals.com/boston/stories/2008/10/13/story30.htmlcid=1257256510ei=aU3zSMmEOpLgyQS32eR7usg=AFQjCNHQjmsa9ipnF2CS4un_J6qaHYusWwFidelity sheds portion of breal estate/b investment group/abrfont size=-1font color=#6f6f6fBizjournals.com,nbsp;NCnbsp;-/font nobr1 hour ago/nobr/fontbrfont size=-1Pyramis Global Advisors, a division of Fidelity Investments, is spinning out the private equity arm of its breal estate/b group. A Fidelity spokesman declined b.../b/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/0-1fd=Rurl=http://www.msnbc.msn.com/id/27158239/cid=1257256510ei=aU3zSMmEOpLgyQS32eR7usg=AFQjCNEintD4a2zGz1JGl7Ew9LfVmRZd5gDepartment of Justice developer not able to get financing/a font size=-1 color=#6f6f6fnobrMSNBC/nobr/font/fontbrfont class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1257256510hl=ennobrall 325 news articles/nobr/a/font/div/font/td/tr/table

Falcon Announces Best-in-Class Green Real Estate Project - MarketWatch

Grand Rapids hosting UM real estate forum; showing off development - WZZM

The Short Sale Formula Launched to Help Real Estate Investors ... - PR Web (press release)

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://news.google.com/news/url?sa=Tct=us/3i-0fd=Rurl=http://www.prweb.com/releases/outsourceshortsales/shortsaleformula/prweb1431994.htmcid=1257188797ei=aU3zSMmEOpLgyQS32eR7usg=AFQjCNFO-gY7mVGRI8nzsx0bN7Bn4bR46Aimg src=http://news.google.com/news?imgefp=E5fG3VEd68MJimgurl=www.prweb.com/prfiles/2008/10/06/219405/gI_SSFHeader.PNG.jpg width=80 height=32 alt= border=1brfont size=-2PR Web (press release)/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/3-0fd=Rurl=http://www.prweb.com/releases/outsourceshortsales/shortsaleformula/prweb1431994.htmcid=1257188797ei=aU3zSMmEOpLgyQS32eR7usg=AFQjCNFO-gY7mVGRI8nzsx0bN7Bn4bR46AThe Short Sale Formula Launched to Help bReal Estate/b Investors b.../b/abrfont size=-1font color=#6f6f6fPR Web (press release),nbsp;WAnbsp;-/font nobr6 hours ago/nobr/fontbrfont size=-1The Short Sale Formula will be released to the breal estate/b investing community to provide a step-by-stop formula on how to put together a short sale packet, b.../b/font/div/font/td/tr/table

Bahrain real-estate market ‘faces record year’, says expert ... - Al-Bawaba

Real estate bust: Toledo wins at Big House - San Francisco Chronicle

Now Is The Time To Invest In Commercial Real Estate - PR Web (press release)

Real Estate Investors meet Tuesday - Prescott Daily Courier

Great Food, Good Drinks and Luxury Real Estate on Main Street - Eastside Business Journal

Hypo Real Estate#39;s Viermetz Steps Down After Bailout (Update1) - Bloomberg

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://news.google.com/news/url?sa=Tct=us/9i-0fd=Rurl=http://www.topnews.in/hypo-real-estate-tussle-german-government-274283cid=1256598407ei=aU3zSMmEOpLgyQS32eR7usg=AFQjCNEmJUxLEBo_MVDZ3-nPZaWp21JAyAimg src=http://news.google.com/news?imgefp=sLzMPKSSKvoJimgurl=www.topnews.in/files/Hypo-Real-Estate_1.jpg width=80 height=78 alt= border=1brfont size=-2TopNews/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/9-0fd=Rurl=http://www.bloomberg.com/apps/news%3Fpid%3D20601100%26sid%3DaqkEy1ZoxSwY%26refer%3Dgermanycid=1256598407ei=aU3zSMmEOpLgyQS32eR7usg=AFQjCNFGut2F5SYrBIfqRtum3i1uJzjuEwHypo bReal Estate#39;s/b Viermetz Steps Down After Bailout (Update1)/abrfont size=-1font color=#6f6f6fBloombergnbsp;-/font nobrOct 10, 2008/nobr/fontbrfont size=-1By Nandini Sukumar and Oliver Suess Oct. 10 (Bloomberg) -- Kurt Viermetz quit as supervisory board chairman of Hypo bReal Estate/b Holding AG, five days after b.../b/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/9-1fd=Rurl=http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSL813731320081008cid=1256598407ei=aU3zSMmEOpLgyQS32eR7usg=AFQjCNGy-9xoOECMMI9OFPkB0PDaQd_gNQUPDATE 1-Hypo bReal Estate/b gets access to credit line/a font size=-1 color=#6f6f6fnobrReuters/nobr/font/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/9-2fd=Rurl=http://news.xinhuanet.com/english/2008-10/08/content_10162155.htmcid=1256598407ei=aU3zSMmEOpLgyQS32eR7usg=AFQjCNGcX39ptDBGhpYSiIVrIerpS_hyyQHypo bReal Estate/b changes its CEO/a font size=-1 color=#6f6f6fnobrXinhua/nobr/font/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/9-3fd=Rurl=http://www.monstersandcritics.com/news/business/news/article_1436206.php/Hypo_Real_Estate_chairman_resigns_after_bail-out_cid=1256598407ei=aU3zSMmEOpLgyQS32eR7usg=AFQjCNGwSmOsTY4DIdpjTfo1aZyXU2ggLwHypo bReal Estate/b chairman resigns after bail-out/a font size=-1 color=#6f6f6fnobrMonsters and Critics.com/nobr/font/fontbrfont size=-1 class=pa href=http://news.google.com/news/url?sa=Tct=us/9-4fd=Rurl=http://www.iht.com/articles/ap/2008/10/07/business/EU-Germany-Hypo-Real-Estate.phpcid=1256598407ei=aU3zSMmEOpLgyQS32eR7usg=AFQjCNHz2gSdBUUCtTNBI_pJHmvwB_2-HwnobrInternational Herald Tribune/nobr/anbsp;- a href=http://news.google.com/news/url?sa=Tct=us/9-5fd=Rurl=http://www.bloomberg.com/apps/news%3Fpid%3D20601087%26sid%3DawNS2jf5LLJA%26refer%3Dhomecid=1256598407ei=aU3zSMmEOpLgyQS32eR7usg=AFQjCNGeIq-PfKO04McILCcVArHBuAkx0AnobrBloomberg/nobr/a/fontbr/font class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1256598407hl=ennobrall 97 news articles/nobr/a/font/div/font/td/tr/table

Real-Estate - Google News

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