4 Ways Showing Leadership Increases Your Property’s Value and Rents
Buy real estate in an improving area and manage it well and watch your property value and/or rents increase. Seems obvious right? But Al Williamson, who has been a landlord since 1996 and focuses on corporate housing and short-term rentals in revitalization areas, discover a method that helped increase his property values and rent even more … and faster.
Al is also one of many speakers who will be presenting at the 1st annual Best Real Estate Investing Advice Ever Conference in Denver, CO February 24th to 25th.
In a conversation with Al all the way back in 2014, he provide his Best Ever advice, which is a sneak preview of the information he will be presenting at the Best Ever conference.
What’s Al’s Best Ever advice? He explained how he was able to achieve massive financial gains by investing in revitalization areas and showing leadership.
When Al analyzes properties, the first qualifier he looks for is $100 per month per unit in net income. But, to build on top of that, he looks for properties in revitalization areas because he’s discovered that he can not only cash in on the natural appreciation, but also affect the speed of equity growth through his leadership. “Taking some easy steps,” Al said, “I can improve the neighborhood and capture the equity just based on showing some leadership.”
How Does Leadership Improve a Neighborhood?
Al explained that the action he takes to improve a neighborhood is painfully obvious. He says, “I always suggest that you’re the biggest landlord in the area that you are in. You go into it just buying up something big or enough properties so that you can have some influence … Then, start insisting on some things to make the neighborhood better.”
Here are four specific examples of leadership Al has taken:
1. Trash-Free Zone
“First, you’ve got to make sure the neighborhood looks just like the Hilton: no trash on the ground, ever.”
“Get together and get a landscaper to mow the lawns. Basically like an association.” In this comment, Al is referring to common areas, and not people’s personal lawns.
3. Trash pick-up day
“One thing that is super effective is ordering a dumpster … I order a large 40-yard dumpster, have it placed in front of my apartment building and put a sign on it telling people to throw their junk in it. Everyone has junk in their house they want to get rid of. Something big that they want to get rid of that needs to go to the dump … [This] gives them a legitimate way of meeting their needs and it costs nothing. The city provides it for free.”
This is the leadership tactic that Al recommends everyone start out with. “If I was starting in a new neighborhood, I would start off ordering a large dumpster and putting it there and putting a sign there … I’m encouraging people to participate and they will because there’s a pent up need that they have.”
Al continues by saying, “They’re actually following an instruction that I’ve given them to meet their need and they are grateful for it. It is a great way to build a relationship with neighbors that you may be meeting for the first-time.”
4. Donating to local revitalization groups
“You can speed up what’s going on [by] adding to the fly wheel by participating by sending money to the neighborhood groups who are giving you traction and helping you raise your rents. Just small donations help them every month.”
What are the Benefits of Leadership?
The two occasions Al executed this strategy, he was met with huge financial rewards. “I’ve gone through two revitalizations,” Al explained. “The first one is a three unit building … I started off with $144,000 [and it] went to $625,000 because of revitalization. The next one was my apartment building. It’s an 8-unit building [that] rents started off at $375 … but now that it’s improved to where it is, the $375 rent, which was cash flowing [when I purchase the property], is now $900 per unit.”
Obviously, 100% of the equity and rent increases are not attributed to Al’s leadership skills. However, Al says the main point of showing leadership is because “you want to be the epicenter of the good things happening. You don’t want to be on the cusp of that. If the people around you are doing nothing, it is very easy to outshine them. It’s just financially rewarding to do that, especially if things are improving anyway. You want to be on the leading edge of that financially so you can be in a position to sell into strength … When people realize the neighborhood has changed and is better and the pendulum starts over-swinging, that’s the time you want to be pointed out as the example of what’s good about the neighborhood and cashing in on that.”
Al’s investment strategy is to buy properties in revitalization areas. On top of the rent increases that come naturally as the neighborhood develops, he also works towards improving the neighborhoods and capturing equity by showing some leadership.
A few examples of leadership Al has shown are:
- Encouraging the neighbors to maintain a trash free zone
- Ordering a large dumpster for other homeowners and tenants to throw trash into
- Getting the homeowners and tenants to chip in for landscaping common areas
- Donating to the neighborhoods local revitalization groups
By showing leadership in a revitalization area, you’ll be perceived as the epicenter of growth, which is rewarding not only from a financial perspective, but from a relationships and reputational perspective as well.
Want to learn more about raising property values and rents, as well as a wide range of other real estate niches? Attend the 1st Annual Best Ever Conference February 24-25 in Denver, CO. It’s the only real estate investing conference whose content and speakers are curated based on the expressed needs of the audience. Visit www.besteverconference.com to learn more!
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