Inherited a fully paid NYC rental that barely turns a profit due to steep expenses. Even without mortgage costs, cashflow is minimal. How can real estate investments be structured to deliver better returns?
The challenge of low returns despite a fully paid property is not uncommon in high-cost environments like NYC. I’ve noticed that incorporating value-add strategies can markedly improve profits. In my experience, undertaking selective renovations that justify rental rate increases often makes a significant difference. Additionally, reassessing your operational model to reduce costs or restructuring leases to better capture market rates can help. It is also beneficial to explore varied revenue streams such as short-term rentals, though this requires careful planning and compliance. An optimized expense strategy alongside tenant-focused improvements can result in healthier cash flow.