3 Critical Steps To Maximise ROI From Your Property Investment

History dictates that property investments generally produce positive ROIs. It’s the simple way the world works; property prices increase over time, so when you eventually sell your asset, you get more money from it. This shouldn’t be used as an excuse to be lazy! If you’re serious about making money, you must maximise the ROI from all of your investments. One unique element of property investments is their ability to be influenced by things other than market factors.

For example, you can’t do anything to influence the price of stocks and shares - but you can do multiple things to make your property investment more valuable, generating a bigger ROI. It’s not particularly difficult either; here are three critical steps every property investor should follow:

Make Value-Adding Renovations

Increase the value of your investment property with some essential renovations. Many spring to mind, including:

All three home improvements have one thing in common: they add value to the property. Whether you plan on flipping this home or renting it out, adding value will ensure you get the biggest return on investment. An improved home with lots of modern features will command a higher rental price, meaning you get more money each month. Of course, renovations add money to the overall resale value, so it can quickly be flipped for a sizeable profit.

Reduce Your Mortgage Costs

Consider working with an investment property mortgage broker to get the best mortgage deal possible. Properties cost hundreds of thousands of dollars and 99.99% of people won’t have this much cash hanging around. You’ll need to finance this purchase through a mortgage, but a broker ensures you keep the costs of financing your property as low as can be.

This can mean getting better interest rates, so you pay thousands of dollars less for your mortgage over time. It’s incredible how much money can be saved here, essentially reducing your overall investment input. Spending less money widens the profit margins and elicits a better ROI.

Improve Tax Efficiency

It’s also possible to reduce how much tax you pay on your property. This will usually come in handy when selling the investment and getting the full ROI. Capital gains tax can kick in and force you to pay crazy rates - but if you hold onto your asset for at least one year, you automatically qualify for lower capital gains tax rates. On the other hand, short-term capital gains are based on ordinary 2024 federal tax brackets.

Moreover, you can find legal loopholes in paying tax on property sales. If you spend a couple of years in the property before you sell it, you may not need to pay any tax on your profits at all. Work with a proper tax advisor before doing any of this as they’ll explain how to do everything 100% legally and by the book. Reducing your tax expenses means your profit margin can be significantly higher.

Don’t settle for a small ROI when you can achieve a far bigger one. Yes, property investments are generally going to make money over time, but you could easily make 10, 15 or 20% more with the right maximisation strategies!