BRRR Real Estate Strategy
There are dozens of different strategies individuals can take when acquiring rental properties. A great system or strategy is called the BRRR method. This acronym stands for Buy, Renovate, Rent, Refinance, and Repeat. This strategy can be an efficient and lucrative process. In this two part blog feature we break down the five different aspects of this real estate strategy.
Buying Real Estate
There are many different things to consider in choosing a property to hold as a rental.
1) Location. Location is one of the most important aspects to investigate when looking at a rental property. The property should be in a growing community close to places of employment, schools, and amenities.
2) Cost. A key to successfully investing in real estate is purchasing an investment property at a good deal at the right time for the market. Compare the cost of your potential property against comparable houses and add a budget for any potential renovations.
3) Rental income potential. If the property is already rented out, look at the rental history and current rental rate — and then compare those rates to others in the area to make sure the rate is at market value. If it was previously an owner-occupied property, you can check on Craigslist for rentals that are similar in size, amenities, and location. Learning how much they’re renting for will give you a better idea of what you could charge.
4) Renovations needed. Making renovations to a property can provide added profits- however, it is important to estimate the cost of the potential renovations prior to purchasing the property. Otherwise they may take a larger amount to complete then you originally planned for. Consult with an experienced contractor if you need help in putting together an accurate renovation budget.
5) Consider appreciation. There are two kinds of appreciation when it comes to real estate: forced and market. If you buy a house and do a bunch of repairs to increase its value, that’s forced appreciation. If the neighborhood improves or the market naturally increases in value over time, that’s market appreciation.
Westbow Capital’s strategy
Westbow Capital’s acquisition strategies include buying purpose built rental homes developed by sister company, Westbow Construction, and buying newer mid-to-low density homes. A final acquisition strategy will be to buy some older properties that could have some forced appreciation through renovations in specific markets within Western Canada. To learn more about Westbow Capital’s Strategy, visit our website or our campaign page on FrontFundr