Apr 3, 2016
Boost Your Property's Value With These Five Simple Tips
A property, more often than not, is one of the most expensive investments you can ever make. If you are investing in property with the goal of reselling it later, you have to figure out how to increase its value. However, increasing and maintaining the value of your investment requires a lot more than just a slick of paint. With the right knowledge and a bit of hard work, you can significantly increase the value of your property and register great return on investment. Here are five surefire ways you can increase the value of your investment property, whether you are preparing it for sale or rental purposes. 1. Optimize the property’s use Properties that are put to optimal use have greater market value than those that are not. As an investor, make it your strategy finding properties that are being underutilized and then improving on their use. Here is an illustration: think about a parcel on land on the suburb of a fast growing town. Clearly, having cattle roaming it is by no chance optimizing its potential use as an investment. Depending on location, putting up an industrial facility or a subdivision on the property would certainly boost its value. On a micro-scale, you need to be shopping around for properties that you change to boost the income they provide. For instance, converting a warehouse into loft-style apartments is a change that can significantly drive the value of the property upwards. One of the most popular trends presently is conversion of office buildings into condominiums. On a smaller scale, if you own a residential property in a college district, you might consider remodeling and renting it out by the room to students looking for accommodation rather then renting out the whole unit to a single tenant. You stand a chance of getting twice as much in rental income by doing this. However, be sure to secure local authorities’ approval before embarking on this kind of project. Bottom-line: There are hundreds of opportunities in the marketplace. Some of them will allow you to change use. Be sure to have the resources, expertise, and experience to effect the changes you are contemplating on the property. 2. Buy wholesale, sell retail In case you do not know, you can actually buy properties at wholesale and sell to other investors or potential homeowners at retail. All you have to do is know where to look for such properties. So how does this work? Think about buying an entire apartment building, or a multi-family property, then converting it to suit individual titles. The real estate world calls this stratification or ascondominiumization. Once you are done with conversion, you can sell off each unit at a substantial profit in return. You call apply the same approach to raw land as well. All you need to do is acquire a large parcel of land and subdivide it into lots for sale at retail. Bottom line You may not have the expertise of cash to get into this kind of investment. However, that should not dampen your spirit. Look out for locations where this is already happening and cash in on the rippling effect as such projects usually drive up values of neighboring projects. 3. Effective marketing Marketing has a special spot in real estate investing. You need to be an excellent marketer id you wish to get value for your property investment. Attract the desired buyer, tenant or seller by applying proven marketing techniques and strategies. With quality marketing, you can minimize purchase price while maximizing your selling price and eventual income. For instance, an excellently marketed property can sell at 5% to 10% more than a poorly marketed one. The same is margin applies to rental properties as well. That is how priceless quality marketing is. And the good news is, marketing is a science; one that you can learn and master. 4. Renovations Renovations can greatly improve a property’s value. Most investors do this on their own, especially if they lack the capital but have expertise. Neighborhoods of transition are a great source for rundown properties that you can purchase for renovation. Look out for well-built, yet neglected, in areas with a potential for property boom. Be sure to purchase structurally sound properties. Buy such properties, renovate to increase their values, and then sell at a profit. You can also grow your investment portfolio by renting out those properties. Your expertise and labor play an important role in increasing the property’s value. Whether you are going to sell or rent the property, be sure to keep the renovation work simple. After all, the renovation work is meant to make the property appeal to potential tenants or buyers, not you. Learn to differentiate between renovations that bring value for money and those that do not. Bottom line: Look out for a property that requires non-structural, touch up upgrades with an immediate impact on the property’s appeal. This way, you will stand a chance of selling the renovated property at a profit. Remember, your goal is to ensure that you get return for your time and effort. 5. Speculation: The popular secret Speculation fuels property prices. Unfortunately, it also fuels emotions and greed. And emotions trigger bad decisions, which has resulted in the downfall of most property investors. However, speculation can be a great ally if you know what you are doing and are basing your actions on facts. All you have to do is know when to jump in and ride the wave. Bottom line Speculative investing can be quite profitable. However, you have to know that you are in for a short period and the actual economic fundamentals do not work in this case. You need to know how to respond to the variables that are out of your control. In addition, you need a lot of capital to speculate effectively. When you are planning to sell or rent out a property, an appraisal is likely to be part of the process. The appraiser comes in to determine your property’s current market value. The tips discussed above can help you prop up your property’s value and deliver great return on investment.