Monday, February 19, 2007

'Value-Added' Possibilities Frequently Overlooked

"Value added's" . . . not the best grammar, but something that every property investor should consider when they are evaluating real estate for purchase. It's not just the bricks and mortar; it's not just the cash flow; it's not just the appreciation. Prospective purchasers need to look for ways to add value to a property.

It could be as simple as adding washing machines and dryers -- either coin-op in a common area or machines for each individual unit; it could be knocking down a dilapidated structure at the rear of a property, and paving it for parking -- particularly in areas where little off-street parking is available. Value-added possibilities can be found on vacant ground that is part of the property being purchased. Is the vacant area large enough to build storage units for rent? Could the ground be rented to a Christmas tree vendor in the winter months for extra income? Adding value can also come in the form of newly installed insulated windows. This saves your residents money on their utility bills, giving you another selling point for prospective renters -- and a justification for bumping rents up.

There are many, MANY more ways to add value to an investment property. But you have to think outside the box!

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