Real Estate, When Beauty Is A Beast

Welcome!  |  Home   
Real Estate Investment Property

Your Premier Source for Turnkey Cash-Flow Investment Property

  "Live Where You Want.  Invest Where it Makes Sense!" ™

Real Estate, When Beauty Is A Beast

When owning and operating investment real estate, remember that everything comes with a price. And we're not just talking about the purchase price. This includes capital expenditures you make after you purchase the property itself. Some of these additional financial outlays are wise but many simply are not. A very common mistake made by real estate entrepreneurs is to improve their properties unprofitably. Such is the case with ornate, unusual and beautiful landscaping. It is costly to design, purchase and install. If you prefer feeding your ego over earning profits, so be it. But if you're more interested in making bigger deposits at the bank, consider carefully all the effects of landscape improvements.

In many cases the real price of landscaping is only partially paid when you purchase. This is because of the ongoing high cost to maintain the improvements for many, many years to come. Unless you can absolutely guarantee that you can increase your revenue by enough to both easily pay for the improvement and the increased cost associated with maintenance and replacement of specialty landscaping such as ponds, waterfalls, hybrid trees and bushes, etc., then don't do it.

The crux of the matter is that often beautiful landscaping and plantings may add some curb appeal to the property, but the cost to maintain these items may well eat up any differential in income produced by the enhancements and additional profits as well. The net effect could be a lower N.O.I. and the resultant lower end value. Wisdom will tell you to only improve your property when the cost of the improvements will be paid for, with a profit, by the increased revenue and/or reduced expenses. As with all things real estate, it's not rocket science. When it comes to landscape improvements, keep things simple and they will pay bigger dividends over time. Good luck in your investment career.

Roger Beattie is an accomplished real estate investor and writer. He and his programs have appeared in many major publications including Forbes Magazine and The New York Times. He currently has his own real estate blog.