In Real Estate, It’s Location, Location, Something Else
Location, location, location.
Who hasn’t heard that saying.
As my wife and I are beginning our search, anew, for rental property, it occurred to me that this is not correct.
It’s value, value, value.
While it includes location, it’s not the only thing. Think about it…if you buy a rental property in the BEST location in the city, but overpay, you’ll never see a cash profit.
We’ve done very well as far as tenant acquisition, property management and tenant disposition. Our turnover has been remarkably low and no one has missed a payment in 8 years. Unheard of.
This is totally because tenants feel that they are receiving value (and careful screening on our part, of course), given their needs (this is a critical concept). They get a property in a good location, that’s well kept and have landlords who act reasonably fast in dealing with issues. We hope to implement some more ideas that’ll make it easier for tenants to rent from us as soon as we have more scale.
But we also make sure we “run” the numbers to ensure cash flow profit. This includes doing our own operating cost estimates (independent of the previous landlord’s estimates) and factoring in our own mortgage payments. My wife says that you make your money when you buy a property, not when you sell it. I think she’s right.
So value is apparent in every phase of real estate and it’s not all about location.
