Tips to Maximize Real Estate Investment Profits

The process of investing in real estate involves the acquisition, possession, management, rental, or sale of real estate property for profit. While investment in real estate can be a profitable venture that can generate a steady income while building equity in a relatively easy and safe manner, failure to have the right know-how to monitor how the investment is performing can lead to massive losses.

There are two ways in which an investor can make profits in real estate. One is through capital growth which can be achieved when a property is sold for more than it was paid for. Another strategy is leveraging rental yield, the rent earned from leasing to tenants after deducting maintenance and running costs.

For a real estate investment to be profitable, it is essential to know how the local market works. To maximize profits, it is advisable to find markets that are in the expansion phase. These markets guarantee rising sales and prices, good affordability, rising capital investment, and low construction. Investors should also time their investments wisely to avoid losing money. For example, it is advisable to avoid investing in real estate in hot markets. This is because choosing to invest when the market is hot comes with the risk of buying a property at higher prices.

Another determinant factor of whether a real estate investment will be successful or not is the location of the property. Location is considered a significant factor in appreciation. For example, when the neighborhood around a property progresses and transit routes, shopping centers, schools, and playgrounds are added, it is more likely that the property’s value will appreciate. However, a decay of the neighborhood can lead to the depreciation of a property’s value. Great distance to major business districts, establishments, schools, hospitals, and restaurants can also decrease the value of a property.

Providing extra services to tenants can make a property more attractive. For example, a property that offers laundry, garbage collection services, or even allows tenants to keep pets would attract more tenants than a property that didn’t provide those services. In addition, the supplementary services can be provided at an extra cost which could lead to increased profits.

Real estate investors can also maximize profits by engaging in property flipping, which involves adding short-term high-return fixes to houses and selling them. While this can be a lucrative way to maximizing profits, an investor should have an eye for properties that can yield returns after having them fixed. It is also essential for an investor to understand the property’s underlying costs and potential value and the necessary skills required for the renovations.

Nowadays, most people looking for property to buy or rent rely on the internet to find their preferred choice. The best way to build a brand is by using the many social media platforms. For instance, maintaining a website that describes the type of property you deal in, the expected rent, and a virtual tour around the property can attract many potential buyers, investors, and tenants.

Castellan Real Estate Partners – Improving Portfolio Energy Efficiency

Headquartered in New York City, Castellan Real Estate Partners has conscientiously endeavored to improve the energy efficiency of its entire portfolio. According to the United States Environmental Protection Agency, improving energy efficiency is one of the most cost-effective and fastest methods of achieving significant societal gains. Increased efficiency has a positive environmental impact because it can reduce greenhouse gas emissions and water use.

Economically, improving energy efficiency can reduce utility bills, help stabilize electricity price volatility, and create jobs. By improving energy efficiency, overall electricity demand decreases. Over the long run, this reduces the need for additional infrastructural expenditures on electricity generation and transmission. Improving energy efficiency also helps diversify utility resource portfolios and hedges against fluctuating fuel price uncertainties.

Castellan Real Estate Partners engaged the services of engineering company Bright Power, Inc., to perform energy audits of each of its properties. The objectives were to determine new ways to save energy, decrease operating costs, and maximize profits. The project comprised three phases: 1) performing an energy audit and producing an energy audit report that contains energy-saving recommendations, 2) reporting costs, savings, and payback periods for improvements, and 3) determining optimal cost-saving measures and accepting bids for improvement projects from contractors.

Several projects were identified that would lessen energy costs and fuel use. Heat balance in buildings was the most significant project.

Most Brooklyn and Northern Manhattan multifamily structures have central metered systems. Primarily because of the age of the buildings, considerable temperature differences may exist among units. Some units may receive too much heat, while others receive too little.

To compensate, landlords often raise the temperature to satisfy the needs of several residents. Other residents may have to open their windows, at the height of winter, because their units are too hot. The imbalance leads to energy waste, with buildings overheated to meet the needs of a proportionally few tenants.

To achieve heat balance, air flows and temperatures in different sections of buildings were documented. This information resulted in new venting or suppression of current venting for equal distribution of heat to every unit.

Other smaller-scale projects to lower energy costs across Castellan’s properties included new toilets that limit the amount of water when flushed, common-area door seals, low-flow showerheads, roof insulation, and high-efficiency light bulbs.

These projects also qualify for rebates from New York State Energy Research and Development Authority, which reduces up-front expenses and the length of payback periods. Castellan Real Estate Partners ascertained that converting the oil boilers to natural gas will bring the most effective fuel cost reduction.

Castellan Real Estate Partners equipped all of its buildings with heat sensors, which manage boiler timing and temperature for further reduction in fuel consumption. The company also collaborated with United States Energy Services to connect these heat sensors to a digital platform with reporting and diagnostic capabilities that help to continuously improve energy usage.

Castellan Real Estate Partners began acquiring properties in 2009. Since then, the company has executed real estate transactions with a market value of over $1 billion.

Castellan Real Estate Partners Participates in Urban Sustainability

Castellan Real Estate Partners, a full-service real estate investment firm, provides investment, financing, development, construction, and management services. The company’s principals have a proven record of successfully executing real estate transactions backed by a professional and highly skilled workforce.

Taking advantage of a favorable buyer’s market brought about by the financial crisis in 2009, Castellan Real Estate Partners began acquiring undervalued real estate assets. The company has since completed real estate transactions with a market value of more than $1 billion. Castellan Real Estate Partners focuses on retail and residential markets in New York City and other leading metropolitan areas.

When conducting business in urban locations, the issue often is whether real estate companies are investing in areas with questionable sustainability and high carbon footprints. Densely populated cities are seen as having adverse effects on the environment. Surprisingly, research performed by the City for Neighborhood Technology and European Commission Joint Research Center reveals that cities with the most density generate the least greenhouse gas emissions per capita.

City inhabitants have smaller carbon footprints than suburban dwellers, primarily due to city residents commuting daily by shared mass transit and generally living and working in buildings with small spaces. As a result, city dwellers use fewer resources than people living in single-family houses.

Given the inherent sustainability of densely populated centers, cities such as New York are taking additional steps to reduce their carbon footprint. These undertakings include new infrastructure to decongest automobile traffic, renewable energy sources to energize trains and businesses, and financial incentives to building owners to make their buildings more environmentally friendly.

A long-term New York property owner, Castellan Real Estate Partners has cultivated strong relationships with various government agencies, such as the Northern Manhattan Improvement Corporations, the Community Environmental Center in Brooklyn, and Harlem Community Development Corporation (HCDC). These relationships have resulted in the real estate company participating in programs such as New York State Weatherization Assistance.

Castellan Real Estate Partners was awarded more than $1.7 million in weatherization grants, which were used to improve the energy efficiency of its buildings and improve company properties, including the conversion of existing oil-burning boilers to dual fuel burners that can burn oil or natural gas. As a result of Castellan Real Estate Partners’ enthusiastic participation and commitment to the weatherization programs, the company was selected by HCDC to install rooftop solar panels on 148 West 141st Street. Castellan Real Estate Partners is acknowledged as the first owner to participate in an HCDC-sponsored solar panel program.

This enabled Castellan Real Estate Partners to help mitigate climate change while HCDC funds were helping subsidize the improvement. The program also was advantageous for the tenants of Castellan Real Estate Partners, who benefited from the improvements without having to shoulder rent increases that would have been typical for these improvements.

Local contractors completed the projects, which helped create work locally. As active supporters and participants in the program, these local agencies requested Castellan Real Estate Partners to help them lobby state and federal lawmakers for increased funding.

Castellan and the New York State Weatherization Assistance Program

A former associate in the fixed-income department at Salomon Brothers, John Salib has served as managing principle with Castellan Real Estate Partners since 2007. Charged with overseeing all aspects of the firm’s operations and investment activity, John Salib leads the company in enhancing properties through energy-conserving renovations.

Relying on ongoing relationships with New York organizations such as the Harlem Community Development Corporation (HCDC) and the Community Environmental Center in Brooklyn, Castellan has secured more than $1.7 million in grants from the New York State Weatherization Assistance Program (WAP). Using these funds, the company has improved energy efficiency across multiple properties through measures such as replacing oil-burning boilers with boilers that have dual capacity to burn oil and natural gas and replacing single-pane windows with energy-efficient models.

Castellan also participated in a solar panel project sponsored by the HCDC. In recognition of its lobbying efforts and strong support for the program, the company was selected to install solar panels on the roof of the property at 148 West 141st St.