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Neil Shekhter - of NMS Properties - on Developing Townhouses in Los Angeles

LOS ANGELES, CA / ACCESSWIRE / December 9, 2017 / Developing townhouses is a popular process that some families are choosing to undertake in order to get some extra cash. Learn how to subdivide your land into the construction of multiple townhouses while still living on the land yourself.

These quick and easy steps will show you how to get started.

What is a Townhouse?

If you aren't too familiar with townhouses, it's best to learn what differentiates them from other types of dwellings. Townhouses are most commonly defined as shared-wall housing, which means that all units share at least one common wall with each other.

The townhouse itself is constituted as a singular building, which can be owned by you and rented out to various tenants. Keep in mind that you also own the land as well – you are purely selling the room space for a profit.

There are several measures you can take to ensure that you are building your townhouse in a legal and standard way. To make money developing townhouses, you must follow these five steps:

1. Increase the Value of Your Investment

You can request a tax assessment of your property in attempt to reduce your operating costs. The more you can force appreciation, the smaller of a purchase you can make. There are several tips you can employ to cut corners as well. Be more efficient with your usage of water, gas, and other natural resources. Negotiate the lowest rates possible for repairs and building services.

2. Estimate Your Capitalization Rate

Be aware of your capitalization rate before you invest. A simple formula to determining this rate is:

• Divide your property value by its net income.
• Subtract operation costs from the resulting amount.
• The rest is your capitalization rate.

3. Analyze Your Market

Before taking the final step to rent out your townhouse, do some real estate research to see what the current market is like. Invest in other units to rent out to see what prices are going for. You can get in touch with an agent to get a glimpse of realistic rental prices. Be sure to factor in all of your remaining fees, such as:

• Operating costs.
• HOA fees.
• Maintenance and repairs.
• Taxes.
• Mortgage payments.

4. Try a Real Estate Investment Trust

Invest in an entity that can share your real estate for tax advantages. You will find that over 90% of your taxable income can be disbursed to shareholders. Make sure to find a trust that specifically works with townhouses to ensure the accurate form of real estate holdings.

5. Get Approval and Begin Construction

Start gathering quotes from builders and construction workers for your project. While this may be an overwhelming task, there are a variety of phenomenal builders out there who can get the job done right. Make sure to request a copy of insurance certificates to ensure liability.

You must also obtain a development approval from the town with the help of an architect or engineer. After that, the construction process can begin.

Why Should I Do it Myself?

Many homeowners and land owners ask themselves why they should build townhouses on their own property instead of finding existing dwellings to buy and rent out. The advantages of using your own land to create a townhouse subdivision are plentiful, and far worth the investment.

When you decide to develop on your own property, you benefit from the following:

• You receive far better rental returns than if you were to go with an already-existing unit on somebody else's land. This can help contribute to your mortgage payments or other operation fees.
• You will save far more money in the long run. A land development project typically runs 20% under normal market value.
• You will receive amazing tax benefits. By owning and renting a new property, your taxes will have a huge boost. You can profit from the tax benefits for years.
• Development profits are substantial. You will be making a lot more money developing on your own land.

Beginning a development and investment project can be daunting, but the profits far outweigh the fears. As long as you know to consult your local architects, builders, and real estate trusts, you can ensure a successful new development. After construction is complete, you can start to rent out parts of your own land as individual townhouse units to incoming families and neighbors.

Neil Shekhter is the CEO of NMS Properties, a privately owned real estate management firm that specializes in multi-family and mixed-use properties in the Greater Los Angeles Area and in Santa Monica. Founded by Shekhter in 1988, NMS currently manages more than 70 properties.

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Apartments For Rent In Los Angeles And More - NMS Residential: http:=" " pr.="" report="" 9mu6vgel""="" rel=""nofollow" noopener"="" target=""_blank""> NMS Properties - Real Estate Management Firm: http://pr.report/vyteEo41%22" rel=""nofollow" noopener"="" target=""_blank"">http://nmspropertiesnews.com
Neil Shekhter - Founder and CEO of NMS Properties: http://www.nmsproperties.com/neil-shekhter
Apartments For Rent In Los Angeles And More - NMS Residential: http://www.nmsresidential.com/
NMS Properties - Real Estate Management Firm: http://www.nmsproperties.com/

Contact Information:

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neilshekhter@nmsproperties.com
contact@neilshekhternews.com

SOURCE: NMS Properties

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