How Rehabbing Can Shape The Country’s Economic Landscape
By JD Esajian on August 14, 2015
Rehabbing and renovating homes is so much more important in 2015 than most realize. So why should you do it? Why should you love the real estate investor rehabbing the house next door a little more? And how can you bring a little more value in your own game if you are fixing up and flipping houses already?
Rehabbing Homes Can Boost the American Economy
We know that developing new housing creates jobs, and generates tax revenues. So does remodeling houses. Each home renovated helps to support jobs, boosts local tax receipts, and gets more cash flowing in the economy. This helps the economy at a national, regional, state, and local level. Home builders haven’t been producing enough units according to the National Association of Realtors. This not only pinches the housing market, but the entire economy. Real estate is a major force supporting GDP. And unless real estate is firing on all cylinders neither is the nation.
Processing Distressed Property Inventory
While the mainstream media makes it appear that the foreclosure crisis is long gone and forgotten, the truth is that there are still many billions of dollars in foreclosure properties and distressed loans out there. Even in the summer of 2015 Bank of America announced that it is selling off over $1 billion in non-performing loans. There are far more residential, construction, and commercial properties needing a lift than most can even fathom. To rebuild a truly healthy real estate market these properties need to go through the process of being recycled. Only then will we really be back to par, and be able to see the best years of growth.
Healthy, Quality Homes
Sadly the end of the last boom left the American landscape littered with unfinished homes, half built neighborhoods, broke associations, and thousands of poisonous homes with faulty materials. This doesn’t even include the masses of single family homes that were left to be vandalized and just become modern day ruins. These are all great opportunities. We need healthy, safe homes for people to buy and families to occupy. Rehabbing is a critical part of this. Real estate investors are an essential cog in the wheel that turn these properties into viable and good assets. Ones which better serve the environment, communities, and those desperately needing housing, and sound investments.
Realtors Can’t Sell Ugly Homes
Some real estate investors do pick up ugly wholesale properties from the MLS and real estate agents in order to remodel and flip or rent them out. But one of the chief complaints of Realtors today is that regardless of low mortgage interest rates, and even low home prices, home buyers just don’t want to buy out dated and ugly homes. They’d rather stay put. That means stagnant properties, and markets. It is one of the reasons that new homes have gained traction, and have been able to sell above market prices, while existing homeowners sit scratching their heads as to why their properties won’t sell. This is especially true for those in foreclosure. And it is a dangerous financial scenario for those that don’t get it.
Improves Communities
Distressed properties, and even deadbeat abandoned properties, and run down homes are infectious. They are blights on the neighborhood landscape, and they suck the value out of neighboring homes. Sometimes they become epicenters of crime which spills out, drives out the good residents, and well, we know what the result has been in many of these communities across the country. But it doesn’t have to be, or stay this way. Each remodel helps revitalize the community, the value of surrounding homes, the finances of other homeowners, and enhances quality of live. It is a positive upward spiral.
Unlocking Value
All of the above comes together and means that renovating homes is really the key to unlocking billions in captive wealth. Real estate investors hold those key. Some try to block their way because they really don’t understand how they help, how much they help, and why they do what they do. Some investors don’t even fully fathom how important their role is, and how privileged they are to participate. But make no mistake – this is an incredibly valuable process. Every home rehabbed not only helps the investor directly involved and those they help and give to, but everyone else around them too.