Adding Value To Your Real Estate Investments
By JD Esajian on January 15, 2014
Anytime you buy real estate with the intent of selling it at some point, you are looking to create value. In some cases, adding value may require you to buy low or in neighborhoods that are expected to increase in popularity. More often than not, you will have to create your own value through the addition of quality improvements. It is inaccurately assumed that improvements you make will return an equal amount, if not more, than what you spend. However, you will find that this is not always the case. Adding value to your real estate investments requires the right additions.
Investors are not advised to spend money on random improvement projects. When you are flipping a property, you need to think about what your buyers are looking for. You may not personally like the upgrades that are being made, but you are not the one looking to purchase the property. It is best to consider a neutral upgrade that will appeal to more buyers than a unique approach that only a few will find desirable.
Prospective buyers will always focus on bathrooms and kitchens. You can spend time designing a top of the line entertainment room in a finished basement with custom woodworking, but you will be surprised to find that buyers will not be that interested. They will surely like the work, but that alone will not persuade them to buy. Focusing on kitchens and bathrooms may be boring, but it is what buyers look for. If the bathroom is outdated with wallpaper or old fixtures, giving it a facelift will instantly add appeal. You don’t need to go over the top with design, colors and fixtures, but without a bathroom update, your home will seem old.
In addition to bathrooms, your kitchen is the next most important upgrade you can make. New cabinets, a fresh coat of paint, updated lights and new appliances will make it feel brand new. Most homeowners use the kitchen as the congregating point when they are hosting. Buyers want to see that they can move into a property and not have to worry about spending money on the kitchen. Additionally, if they like the kitchen they will feel more at home and this will lead them to make an offer they otherwise may not have.
There are also simple upgrades you can make to the lighting, flooring, walls and fixtures. Simple additions, like a new front door or exterior shutters, can go a long way. Even if you are not fully aware of what going green is or what solar power is, today’s buyers are becoming increasingly interested in them. Solar roofing panels have increased in popularity over the past few years and it may be a trend that is here to stay.
Putting money in a property without thinking about buyers’ wants and needs may be equivalent to throwing it away. Do your homework for the respective area and research where you can get the best bang for your buck.