Retire Early Lifestyle
Retirement; like your parents, but way cooler

In 1991 Billy and Akaisha Kaderli retired at the age of 38. Now, into their 4th decade of this financially independent lifestyle, they invite you to take advantage of their wisdom and experience.

Understanding How to Increase Your Real-Estate Value

Sam Bowman

Retiring early is a goal for many people. However, the pension system often isn’t sufficient to sustain a decent quality of living for the rest of your life. While none of us can predict how long we are going to live, in the previous decade the average life expectancy rate increased by around 6 years. If you’re hoping to retire sooner, it is imperative to consider alternative ways you can make sure you have a significant and steady income.

One of the more stable ways to prepare for early retirement can be real estate. There is a high demand for properties and multiple approaches to suit your budget and investment goals. That’s not to say the practice is entirely without risk. Real estate is expensive and to see success you need to understand how to squeeze the most return out of these investments.

Utilize Assessments

Buying investment properties can be a route to financial independence in time for your planned retirement. However, going into the situation blind is never advisable. What makes a property valuable can vary substantially depending on the project and the market. You need to take an informed and tailored approach to any improvements you embark on. One of your most powerful tools here is your appraisal.

If you purchased your property with a mortgage, in all likelihood the property appraisal will just have been sent directly to the lender. It’s worth contacting the appraiser to get a copy of this report sent to you too. This document is a helpful guide pointing to the aspects that contributed to its valuation. When you’re trying to raise the value of the property, knowing what elements an appraiser is looking for can be a vital focus for the most impactful improvements you need to make. This is likely to include the condition of the bones of the property and the state of any fixtures and fittings. 

Remember, the appraiser is not going to consider the cozy atmosphere of a house. Buyers might appreciate this, but the intrinsic value of the investment property provides the baseline for negotiations to begin. Focus more on what contributes to this aspect of your property; you can add other components once these essentials are complete. From an investment perspective, this gets your property in the right shape to start making a return.

Hone Your Focus

Every investor has budgetary limits when investing in real estate in the run-up to retirement. However, focusing on a single project can be unwise. Diversifying your investment portfolio helps to minimize potential risks by spreading your capital and it can also maximize profits. This is particularly effective if you start early enough to build gradually. Traditionally this occurs across various types of stocks, bonds, and companies. But it can work well for your property portfolio, too. This doesn’t mean you diversify randomly, though. It’s important to take the time to refine areas of focus for your property investments. 

This may involve honing your investment approach to target specific market niches. Property investment diversity isn’t necessarily about buying multiples of the same style of home in the same type of neighborhood. Review what niches are seeing returns at various points in time or are ready for a resurgence soon. This might mean you have a family home in the suburbs, a retail unit in the city, and a condo by the beach at a single time. The key is to keep on top of how the public is responding to these niches.  

However, this may not be your preferred approach. You might want to focus on reaching specific financial goals for each of your investments. In which case your diversification might be geared toward leveling up with each purchase and subsequent sale. This is diversification of value — either the intrinsic value of the property or the capital you plan to invest in renovating before flipping it. In many ways, this can be a faster way to gain the liquid funds you need to enact your early retirement.

Build Your Profile

Building the profile of your investment properties can be a good way to increase their overall value. Think of it as developing your brand. By focusing on activities to meet the needs and desires of your target demographics, you have a better opportunity to engage with them fruitfully. 

This is particularly wise if you are renting initially before selling. One of your primary challenges is in retaining tenants. It doesn’t matter if your properties are all in a desirable resort town seeing a lot of tourists. If your properties don’t make the tenants want to stay for the long term, you are flushing away a significant amount of your capital. Choose properties close to essential amenities. Make sure you update appliances. Keep a regular routine of pest control and maintenance. This helps you build a solid reputation among tenants. In turn, they’ll tell their friends. You are then able to develop a reliable range of tenants to give you a regular income without the expenditure from turnover.  

You’ll find this particularly beneficial when the time comes to sell these properties. Businesses that invest specifically in rental real estate tend to be more attracted to those sellers that not just have tenants in place but also have a reputation for retaining them. Indeed, if you specialize in commercial real estate, the ability to retain tenants is considered in the presale valuation. It can take a little more effort, but it can pay dividends later.

Conclusion

An investment in real estate can be an effective way to finance your early retirement. However, you can increase your chances of success by creating development plans led by your appraisals. It’s also worth putting effort and capital into a diverse but refined focus for your portfolio. Don’t forget a solid profile can help you both retain tenants and increase your market valuation. There are never any guarantees in investment. But these steps can give you a solid start.  

Retire Early Lifestyle appeals to a different kind of person – the person who prizes their independence, values their time, and who doesn’t want to mindlessly follow the crowd.

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