Right now, we’re going to discuss the importance of maintaining your income producing property.
Featuring:
Bob Nelson, Eugene real estate investment broker
Bob Nelson: Let me continue on with a topic that’s near and dear to my heart, and that’s income producing properties. As you acquire a stock you… In the main, now there’s maybe dividends that are paid and so forth, but the game is typically increased in value over time. As you invest in an income producing property, there’s typically pretty strong cashflow.
So even if the property didn’t go up in value, you’ve got the cashflow that’s coming in, that potentially justifies the majority, if not all of the investment. Then if it goes up in value that even makes it more spectacular.
Bob Nelson: So those are the issues at hand, and now interest rates being as low as they are, unbelievably low, fixed interest rates, long-term mortgage loan interest rates. It’s a grand idea, to the extent that you can justify and afford it, upgrade your property. Make sure that you’re maintaining it, because if you allow that property to slide, that becomes a really tough situation later, as you then face, gosh, I have to do something now. I let the roof go, and I let it go, and now it’s leaking, and now the ceiling is collapsing. Oops. Now you’ve got a major, major expenditure that could have been cured with some very minor repairs or simply a roof replacement.
And given that you can afford so much of this stuff, if you were to place a… As an example, if you refinanced the property, and used the refinance funds to place the new roof or the new siding or whatever it would be… New floor coverings. With my apartments, I’m intending to replace a carpet in the vast majority of the unit. I’m keeping it in the bedroom, because that seems to be what the tenant likes. But I’m putting a hard surface, a laminate surface, a very attractive laminate surface in the rest of the area. More clean, easier to clean, you don’t have carpet that has hair from three or four past tenants, et cetera, embedded in the carpet.
Bob Nelson: It’s just an attractive thing to do. And as you generate an attractive environment, tenants are more prone to get excited about staying at your place, paying rent for a long period of time.
Join Eugene, Oregon, real estate experts: Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments, and Marcia Edwards, Residential Real Estate Broker with Windermere Real Estate, daily at 5:30pm on KPNW for the “Real Estate Today” radio show.
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