How to Build Equity by Investing in Your Neighborhood

Written on July 28, 2013 by , updated on April 11, 2017

Building Home Equity

When you learned about the Pilgrims, you were really learning how to be a successful landlord.

The Pilgrims nearly starved to death until the Native Americans taught them to place dead fish in the ground along with their seeds. The nutrients, including nitrogen, phosphorus, and potassium, in the fish acted as fertilizer, and was the missing mechanism they needed to grow their wheat and corn.

All too often we landlords repeat the Pilgrims’ mistake; we try to grow and build equity without contributing to the surrounding community. And that’s not a sustainable practice for long-term success, especially for buy and hold landlords.

We, the buy and hold types, are uniquely positioned to capture compounding benefits of incremental improvements made over time. We have everything to gain by including the communities the rentals sit in as part of our investment concerns.

But that’s high level classroom talk, let’s make it more specific. Here are five ways a landlord can increase the odds of a profitable equity harvest by making small and super easy community contributions:

1. Support crime watch groups

Neighborhood WatchWhether you are an out-of-state or local landlord, you can help yourself by finding a way to help your local crime prevention watch group. You can find these groups by checking with the local law enforcement agency or city council representative.

Once you’ve found them, consider doing this:

  • Encourage your tenants to participate in watch prevention groups
  • Monitor the group’s newsletters for opportunities to support them and do so
  • Pay dues or mail in a small contributions

In a previous article we Lucas discusses 8 Ways to Create a Safe Neighborhood for your Tenants, which as other practical ways of making sure your tenants feel safe and secure in your rental property.

2. Micro-sponsor local youth groups

youth-kids-campFind the nearest scouting troop, sports club, or after school program and give them a financial hand. Even $5 or $10 per month is meaningful and can be put to a lot of good.

The benefits to supporting youth organizations go way beyond what could be quantified in investment terms. And I don’t think you need convincing that it’s a wise thing to do. So if you have long term-interests in a neighborhood, find a way to support the closest youth group to your rental.

Support can take many forms. Here are some suggestions:

  • Pay for their website hosting
  • Contribute towards their monthly transportations expenses
  • Send them gift cards to buy art supplies

Find a tangible way to contribute. This way when you see your gift being used, you’ll know you’re having an impact.

3. Use Facebook and Social Media to spread good news

Facebook-Banner-LogoYou don’t need to spend all day tweeting and updating your Facebook page to be effective.  Just remember to share favorable news articles and extend the buzz about your neighborhood. Just like a Hollywood talent agent; landlords should always promote their neighborhoods. After all, it is never too early to begin influencing your future buyer.

4. Hire a gardener to manicure your front

curb-appealYour curb appeal is vital to your rental business. You wouldn’t be exaggerating too much if you thought of your well-maintained landscaping as an employee instead of as just an expense!

Landscaping works hard for landlords by:

  • Expressing respect towards neighbors
  • Bolstering security around your property and deterring petty crime
  • Showing appreciation for your existing tenants while recruiting for your vacancies

Your front yard is a big deal to your bottom line and to your neighborhood. It’s so important that you should hire a professional to keep it looking good.

5. Speak up about neglect

broken-lightIf you’re able to do drive by inspections and you see an overgrown lawn, burnt out street lights or something that’s in neglect, pick up the phone and call it in. Act as a CEO would and take the lead. Your business is one store in a strip mall. Assume the mindset of a leader because the neighborhood will decline without leadership.

Bottom Line

Plant a fish by your rental! Fertilize your down payment by contributing directly to the neighborhood surrounding your rental and improve the odds of a bountiful harvest.

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