How Do Owners Get a Good Rate of Return on Their Bryan-College Station Investment Properties

What is Return on Investment, or ROI?

It’s the rate of return you can expect on an investment. In real estate, we refer to that as cash on cash. To calculate your ROI, you take your yearly profit and divide that number by your total investment. So, with rental properties, you’ll take your monthly cash flow and multiply by 12 to get your annual profit. Then, you’ll divide that number by your down payment. That’s it. It’s that simple.

Understanding and Improving ROI

It’s important to know how this works because it’s our goal as investors to increase ROI. If you don’t know how something works, you can’t improve it. That’s why knowledge is power.

So, how do you increase your ROI? It’s not enough to just understand it; you want to improve it. There are two numbers in this equation – yearly profit and down payment. Knowing how to manipulate these will give you the power to increase your ROI.

Achieving the Best Return on Investment

First, you can increase your profit. This is the method that most people would prefer. If you think about it, once you make a down payment on a property, it’s hard to get that money back. So, it’s easier to focus on profits from your property. There are several ways to increase profits. The most obvious way to do it is by raising rents and decreasing expenses. It’s fundamental as a property owner and investor to know this. Rents rise faster than expenses do on a yearly basis, so it’s not uncommon for ROI to gradually increase over time.

The less common way to increase ROI is by decreasing your down payment. But for now, let’s focus on increasing your profits.

Professional Property Management Helps Your ROI

The simplest way to increase rent and decrease expenses is by hiring a good property manager. A property manager is an expense on its own, but a good manager will save you a lot of money in the long run. We have relationships with the best vendors in town, and that means you’ll get the best prices on repairs and maintenance. We know the market, so you’ll get the best rental rates for your investment. We have high renewal rates, which results in long term tenants. That saves you money.

There are a lot of money-saving tricks, and a good property manager will be the best way to increase your ROI. Do your homework, and hire someone who does the job right.

If you have any questions about ROI or College Station/Bryant property management in general, please don’t hesitate to contact us at AssetHERO Property Management.

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