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Put aside the notion that you can expect to receive a predetermined rate of return from a remodeled rental unit. Perhaps you’ve been told, for instance, that a remodeled kitchen will pay back, say, 80 percent of its cost, a remodeled bath maybe 60 percent of its cost, or updated fixtures perhaps 30 percent of its cost.

This is not necessarily true.

To make money at real estate investing, you should never rely on any of these specific payback figures, and instead, learn to evaluate every rental property and every remodeling project on its own merits.

Always keep in mind that your profits relate directly to the degree that your tenants or buyers value your units. At the end of the day, regardless what you spend to remodel, your property improvements are only as good as the price someone is willing to pay for them, and these relative comparisons differ in time and place.

As such, before you make any improvements to your rental income property, research competing properties and tenant (buyer) preferences. Learn what you need to do in order to achieve competitive advantage. Think twice about making any property improvement unless it’s sure to attract tenants willing to pay higher rents or buyers willing to pay your desired higher price.

How to Make Your Budget

Start by developing a cost/income estimate. Research the resale prices and rent levels for rental properties in your local real estate market. Figure out how much you can increase the sales price or rents resulting from each project you undertake, decide on a rate of return, and then compute your budget, which, of course, can vary enormously depending on who does the work, what materials are selected, and the skill with which the job is undertaken.

For our purposes, we’ll assume you want to achieve a 20 percent overall rate of return on the capital invested for the remodel. In this case then, every $1,000 you invest in improvements should increase your net operating income at least $200 a year.

Real estate investors, naturally, can choose whatever rate of return they desire. For instance, some investors might be pleased with a 10 percent rate of return, whereas others may aim as high as 40 percent. What matters most is that you curb your enthusiasm with a realistic look at the amount of increased rents your investments of time, effort, and money are likely to produce before you renovate.

Likewise, creating a budget helps prevent you from over-improving your property. The thing you don’t want to do is to spend money for costly improvements that are not relative to the neighborhood and relative to the prices and rent levels your buyers or tenants are willing and able to pay.

Okay, let’s consider an example and then make the calculation.

After you survey the local rental market for the top rental rates in the neighborhood relative to the size and quality of units you intend to remodel, then apply your rate of return and compute.

Let’s say you feel after renovations that you will be able to raise rents enough to pocket another $150 a month per unit. By applying the 20 percent rule, you would determine that you must limit costs to no more than $9,000 per unit.

$1,800 (12 X $150) / .20 = $9,000 cost of improvements

Again, you have the option of plugging in whatever rate of return you desire. The important thing is to run through your numbers thoroughly enough to be satisfied that your local real estate market actually supports the selling price or rent level you intend to ask.

An Exception to the Rule

Real estate investing is about making the greatest return on your real estate investment as possible and therefore explains the purpose for writing this article about returns on improvements. Still, on some occasions you may want to invest more in your improvements than rent increases justify for other reasons.

To attract a better quality of tenant, for example, or to reduce tenant turnover, cut losses from bad debts and vacancies, or just to have a greater pride in ownership. In these cases, real estate investors simply have to weight trade-offs.

The most crucial thing for you is to crunch the numbers, regardless. Remember, good tenants and pride of ownership benefits you only if you’re collecting enough rents to pay your property expenses and mortgage payments, and you don’t want to be left having to feed your property just to pound your chest whenever you drive by.

One Last Word

It’s probably a good idea to categorize property improvements into those you can do, and those you would never want to do.

For example, whereas it might be okay for you to tackle some cosmetic improvements such as painting, landscaping, carpets, and light fixtures, you must exercise extreme caution when it comes to roofs, foundations, wiring, and plumbing. These types of renovation can be inundated with hidden costs, and unless you pay a price favorable enough to make these types of improvements, you might discover that the amounts you spend to improve the property and its value (or rent levels) after you’ve completed the work aren’t profitable.

Smart real estate investing requires you always analyze the financial details of the deal in front of you before you do anything.

Jet skiing has become a favorite water sport for many, and this is with good reason. These personal water crafts are a lot of fun whether on the ocean, river, or lake, and can accommodate up to four people at a time, depending on the size of the jet ski. Since jet skiing is a lot of fun, especially during the summer, many people have chosen to buy their very own personal water crafts. However, renting them is just as viable an option, especially if you are out of budget. Jet ski rentals are available in various resorts as well as in specialty rental shops.

Why you should buy your own jet ski

There are several advantages in buying your own jet ski, as opposed to simply going for jet ski rentals. If you are someone who goes jet skiing on a regular basis and you dont mind with the upkeep required in owning one, buying a jet ski will be a good investment for you. This will allow you to enjoy the sport anytime you want to and you dont have to wait in line in resorts or rental shops just to be able to secure a jet ski for your water excursions. Also if you intend on opening a jet ski rental business in the future, buying your very own jet ski will orient you with its maintenance needs and other requirements for upkeep.

Although buying a jet ski requires a bigger expense than simply renting, there are some cost-effective options in the market. Buying a used jet ski can be more economical than actually buying a brand new model. Some of these second-hand jet skis may still be in mint condition, especially if these have not been used frequently by their original owners. Although jet ski rentals are less expensive, buying a used jet ski can give you a very good deal, too.

The advantages of jet ski rentals

There are several reasons however why many people choose to rent jet skis, and one of the foremost reasons of course, is affordability. You can choose to rent for an hour or an entire day, which is always considerably cheaper than having to buy an entire vehicle for your summer outings. You can also shop around for rates in advance, so you are sure to end up with the most cost-effective deals possible.

Most novices will do well to choose jet ski rentals instead, as many rental services also offer tutorials to first-time users. If youre still learning the ropes of jet skiing, going for rentals will allow you to orient yourself first and to experiment on whether youre comfortable with the thrill involved in riding an actual jet ski.

Jet skiing is no doubt a fun way to spend some relaxation time alone or some fun time with the entire family. Before buying your own jet ski, check first whether you will be able to keep up with its maintenance requirements or if going for jet ski rentals is a smarter, more cost-effective choice for you.

Problematic tenants cannot be avoided. This happens even in Tampa rental homes. More likely than not, rental property owners have experienced having tenants are headache triggers.

Tenants that pay late rents cannot be avoided also. Even if the proper background checking has been done and credits are good, there will still be a chance that rental fees will not be given on time.

Rental homes in Tampa are one of the most in demand location where families and businesses relocate to. Factors like good weather, nice environment for children, booming business center and vacation getaway are some of reasons why Tampa is the perfect spot to rent a property. It is also the reason why many owners tend to choose this spot to invest in real estate.

But like every type of business, there are problems encountered that if not solved would mean a business downfall. In the case of rental homes, it would be a big setback in an otherwise profitable source of income.

Late paying tenants are one of the most common headaches for property owners and property managers. Rents not paid on time can immobilize the investment. If a regular trend already, actions are taken for the business investment to get right back on track.

Property managers take action in the absence of the property owner. It is one of their duty and what they are paid for. Owners may not be near the property they are renting out. The property managers take their place to make sure that all the aspect of the real estate investment are given attention.

Owners or property managers have the right to talk to the tenant about the past due rent. If this does not work out, a written warning is issued summarizing the details of the late payment.

It is best to have the terms of the lease agreement stated in the letter. This is needed to show as proof for what the tenant has signed in agreement when the initial negotiation was made. State in the letter a specific date that the tenant should pay the rental fee and the proceeding steps to be taken in case payment is not done.

Communication should be open all throughout. Both sides should be heard. Tenants may try and justify their actions. Owners may give out additional consideration. It would all depend on the communication between both parties.

Owners have the right to take appropriate an action if all else fails. He or she may decide to evict the tenant or may enlist the help of an attorney before any decision is made. Rules and regulations vary with different locations.

Property managers in Tampa will know what to do in case late payments become a habit. They may take actions themselves or get legal assistance if it comes to that.

Rent payments are one of those that keep the rental property going. Without tenants and payments, owners will not see a return of their investment even if all other aspects are considered. This is why, the property should not be the only one kept maintained. Payment due dates should also be focused on and noted from the start of the rental home agreement.