28 IDEAS FOR MULTIFAMILY FORCED APPRECIATION

Let’s unpack that a bit further. To increase income, you could do this through collecting more rents. You could also collect more fees or provide other services besides renting the apartments. All this boils down to improving the Net Operating Income (NOI.)

Because commercial property is traded at a value by NOI divided by the Cap rate, the results of an NOI on the value of your rental property can be tremendous.

Capitalization multiplies forced appreciation gains

The obvious benefit to increasing the value of an investment property is when you sell it. There is still a benefit to owning real estate that you have added value to. By increasing the value of the property, the Loan-to-value ratio goes up. When refinancing the investment property, it is not a taxable event because you are just borrowing money

Forced Appreciation can Benefit you at Sale or Refinance

Just because you did not buy a property specifically aimed at a value-add strategy does not mean you cannot benefit from forced appreciation. The capitalized benefits of forced appreciation apply to any investor that is interested in either refinancing their property or selling.

Does this Mean I Need to be a Value-Add Investor?

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