Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.
Grant Cardone has more than $4 billion in assets under management through his real estate investment firm, Cardone Capital. He has built a vast real estate portfolio that focuses on multifamily apartment complexes.
Cardone recently shared one of his secrets in an interview clip that he posted on TikTok. He explained that real estate investors are competing with financial institutions that care about the numbers. These “machines” don’t care about the color of the house, who rents it, and other details. They look at properties solely as investments.
Don’t Miss:
After explaining what the largest competitors think, Cardone shared a story about one of his investments and dropped a gem in the end.
“All real estate has to be activated,” Cardone stated in the interview.
This mentality can shift how you view real estate and potentially help you generate more profits in this asset class.
Cardone shared how he bought a multifamily property with a 77% occupancy rate and upped it to a 95% occupancy rate within 72 hours. When asked how he did it, Cardone explained that he used social media to spread the word and fill vacancies.
By promoting the property on social media, Cardone was able to activate the asset and produce more cash flow. However, Cardone’s approach was more strategic than just telling his friends about the new property. The real estate mogul has built his personal brand for decades, to the point where millions of people know who he is.
Trending: Arrived Home’s Private Credit Fund’s has historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate with just a $100 minimum.
This large audience gives Cardone a head start with any property. He can promote new deals to a large number of people and fill vacancies quicker than the average investor. His efforts to build a brand around himself and his properties make it easier for him to activate his investments.
When you’re looking for a primary residence, it’s a very personal decision. Factors like the neighborhood and schools come into play. The search for these properties also gets more personalized. For instance, you may want an open floor design, a specific color, and other details.
While a personal touch can be good for your home, those details are less important for real estate investments. Investors have to solely focus on the numbers and assess a property based on its ability to generate positive cash flow.
A data-driven approach makes it easier to find real estate that you can activate. If Cardone bought a multifamily property with a 100% occupancy rate, he wouldn’t have as many opportunities to increase cash flow. On the other hand, boosting the occupancy rate from 77% to 95% represents a 23% increase in rental income, assuming everyone pays the same rent.
See Also: Nancy Pelosi Invested $5 Million In An AI Company Last Year — Here’s How You Can Invest In Multiple Pre-IPO AI Startups With Just $1,000.
Real estate investors can raise rent, but doing so risks losing tenants and making the property less desirable for incoming tenants. Even if you raise rent, most jurisdictions have laws in place that prevent a 23% hike in a single year.
Real estate investors may have to get creative to boost cash flow from their properties. Charging for parking, adding a laundromat, including a gym, offering additional space in the complex for rent, upgrading furniture in vacant units, and considering new amenities can increase your cash flow.
Some of these enhancements can make the property more desirable. You may attract new tenants while putting yourself in a position to justify future rent hikes. These are some of the tactics you can use to activate your real estate. The more you activate your real estate, the more cash flow you can access.
Read Next:
Image: Shutterstock
Send To MSN: 0
This article Grant Cardone Shares What Most Americans Don’t Understand About Property Investing: ‘All Real Estate Has To Be Activated’ originally appeared on Benzinga.com