While many homeowners are facing foreclosure today, there are many ways to maximize the potential of a property, and thus create equity to increase value and persevere through falling property prices in many areas of the country. For distressed properties, creating value can be done in a variety of different ways. For potential buyers, identifying properties that are good “add-value” opportunities mean locating properties that, with a minimal amount of capital expense, can be improved to entice buyers and increase value that can translate to higher dollar amount sales in the marketplace.
Physical improvements to a property are usually very easy to conceive, and in most cases will not require a lot of cash spent to improve. It will be rare that a homeowner sees a return dollar-for-dollar in the marketplace, but it certainly helps boost property values and also improves the overall aesthetic of the property which can really help it be seen as more appealing to a potential buyer.
With an investment or income property, improvements to the property can lead to high annual yields on investment, by way of increased income and minimizing vacancy by creating an appealing living experience to renters as well.
Here are some basic improvements that can be done to a property that will improve its overall aesthetic and make the property a more enjoyable, functional place for potential and existing tenants:
-improving storage facilities, keeping property quiet and maintaining privacy for tenancy
-enhancing security and safety at the building
-maintaining or improving landscaping and common areas
-increasing appeal of external appearance
-adding or improving laundry facilities
-maintaining and improving heating systems in the building
-improvement of kitchens and baths, making more efficient and functional
Anyone of these improvements will help a property achieve its best potential, and a combination of improvements can help increase overall value and help make a case for asking higher rents while minimizing vacancies and increasing the performance of the asset. These improvements are just several of many that can be done to increase annual returns to the property investor.