Editors Note: Mike Foundos Sr has been doing this a long time. I mean, really long. So, like EF Hutton, when Mike Sr speaks, I shut up and listen. And, since it never hurts to get back to the fundamentals, here are some words of wisdom gained from real, painful experience. Time to flex those CRE muscles.
Five Ways to Decrease Your Cap Rate
1. Decrease your turnover. Turnover is the biggest cost in apt. investments. Lost rent and refurbishing. Rarely talked about but it’s a cash flow leech. Best ways to decrease turnover are tenant satisfaction, tenant’s credit, don’t sign short term leases, minimum one year, don’t raise rent on a tenant who will re-up for another year, save rent increase for new tenants coming in, they don’t know what the last guy paid.
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