5 Ways Real Estate Investors Waste Money

Sometimes multi-family investors might be spending money in areas where they would be better off as owning an apartment building can be costly, but the good news is there are ways to save money, especially if you follow these tips.

1. Paying utility bills.

If you pay all utility bills on real estate property, you may need to reconsider your decision. By paying your water, electricity, and gas bills you essentially give tenants the freedom to use as much as they want. So make sure tenants are set up to pay for any utilities that are not shared, including water, heating, electricity, garbage, etc. A signed lease that does not clearly indicate that the tenant is responsible for utilities can be a very costly mistake.

Here are five ways to cut utility bills in an apartment building.

1. Reduce water supply costs.
2. Reduce heating and cooling costs.
3. Add light sources with a motion sensor.
4. Use only energy-efficient appliances.
5. Install LED bulbs.

2.Renovations.

Pay attention when renovating your property as what looks good is not always the most economical option. When renovating between tenants, cost-effective yet durable options such as vinyl floors and flat or matte paint are a reliable choice. You will find that over time they last longer and require less cleaning.

As you contemplate what upgrades and improvements you might want to make for your multi-family contractor, be sure to check out this list of practical, attractive, and helpful exterior upgrades that will enhance your property appeal.

1. Install new door handles or hinges.

2. Upgrade the parking lot.

3. Improve walkways.

4. Replace aging windows.

5. Add lighting.

3. Not charging for pets.

If you allow pets to stay free of charge, you lose a portion of a potential cash cow. Statistics show that about 68% of U.S. households own at least one pet, which means you can potentially significantly increase your monthly income. Here are some ways to make a profit:

• Charge pet's monthly rent, if you just add $20 per month, you get an additional $240 per year for each unit. Don't scare away pet owners, but make it clear that they can cause harm, so in order to be compensated, you must collect these fees.

• Charge a non-refundable pet fee. This amount should cover the entire amount that will have to be spent on general cleaning of the house. Somewhere around $200-450 makes sense, depending on the market that you're in.

4. Landscaping.
Landscaping and curb appeal can help you rent out properties faster and attract better tenants. But some investors are so passionate about landscaping that they end up wasting money, they do so much on the front lines that they have to constantly water, fertilize, and pay for professional landscaping.

Tips when looking for a landscape maintenance company:

• Make sure they do what they say.
• Check their performance and quality of work.
• Communicate with all parties involved.
• Make sure they have a reliable reference of policies and procedures.
• Make sure they understand your needs.

5. Not working with an accountant.

Think twice before paying your taxes yourself, while the accountant will cost you money, he more than makes up for it with the return value. The CPA can easily find tax deductions you never knew about, they can also make sure that you are not breaking any laws or regulations or you can continue to pay taxes, but do so at your own risk!

It's easy to fall into the DIY trap of trying to do everything yourself, whether it's a leaking toilet, a lawn that needs to be mowed, a rent that needs to be collected, or an eviction, your decision to take on all the responsibilities won't save you - it costs you dearly while hiring a professional property management company can increase your ROI.