Real estate investing is now on the rise and making more money means adding more value to your property.
People invest in properties basically for two reasons, either for it to be used personally or for investment purposes.
Regardless of what your objective is, you can significantly increase the equity by strategically renovating it to give it a facelift which will automatically add value to it.
This article will provide ideas on how to add value to your property by following some practical steps.
What Is Value Add Property?
Value-add property means a given property some facelift through renovations with the intent to improve it and raise its market value.
The property could have fallen into a state of disrepair for certain reasons such as the previous owner not having the required capital to renovate it, carelessness, or even not having the desire or need to work on it.
Such properties would obviously not be sold at a premium and smart investors can buy them and afterward, overhaul the property which would help to optimize its value in terms of rent and occupancy rates.
Also Read: 5 real estate books for beginners
How to Find Value Add Property?
Granted that there are lots of distressed properties in our towns and cities, you should be careful when making your selection, if you want to buy cheap and good ones.
Below are the steps to take to ensure you get it right.
- Search online; you can find online listings that contain value add properties, foreclosures, and distress sales.
- Look for property investment groups; in such groups, members often network with the purpose of sharing ideas. Also, they usually access to listings of properties available for sale in different cities and states.
- Get in touch with wholesalers; these are the middlemen between property owners and potential buyers, and they can provide you with options.
- Search independently; you can go to the neighborhoods you desire to invest in, and search for available ones.
Home Improvements or Renovation Pay Offs
While some properties may require a total overhaul if you desire to maximize your potential earnings from it, you can see examples of such well-groomed properties and how much they can attract on this post.
There are certain basic renovations/uplifts that are vital if you want to significantly improve the value of such property. Below are the most crucial ones.
- Improve Heating System
In some old or dilapidated properties, a central heating system is either nonexistent or obsolete.
This will no doubt affect the outlook of such houses, as they will appear unappealing.
However, fixing or improving the heating system will go a long way in making such property energy efficient and appealing, thus enhancing its value.
- Create Storage Spaces
Optimize available spaces that can be found under the stairs, wall spaces that could be used for mounted cupboards, spaces at the end of corridors, kitchens, bathrooms etc.
Having storage spaces can help to make a property more appealing and attract higher prices.
However, it is important to first ascertain if doing so will make sense as well as if authorization of any kind is required.
In addition, it is important to work with a professional inspector who will ensure that everything is done according to local specifications.
Areas such as electrical wirings, roof/gutters, drainages, etc. should be properly monitored.
- Upgrade Your Garden
One open secret on how to make a property to appreciate in value is to enhance its aesthetic appeal, and beautifying/redesigning the garden is a sure way to achieve that.
Dead tree stumps, shrubs, and plant litters should be removed. Uniformly cutting flowers, mowing lawns, and watering them is also encouraged.
You should equally be conscious of the sort of flowers and trees to plant, are they colorful enough or have character?
In addition, you can make it more sophisticated by creating specific sections for seating, barbecue, storage, etc.
- Update Plumbing & Wiring
Working on plumbing and wirings can be a challenging and even disruptive thing to do, but it is very necessary to ensure that plumbing and wiring are not only in perfect order but also aesthetically appealing.
However, it is advised to work on it early on so it does not affect the finishing touches when beautifying the property.
Old and rusty pipes should be replaced with modern ones. Old sockets, switches, and other electrical components should all be replaced with new and modern ones.
These would also contribute to enhancing the value of the property.
- Focus on Floor
The floors of buildings are often worn out due to wear and tear occasioned by years of threading on it.
If possible, you can remodel the floor and ensure it is made with easy to clean and durable materials such as tile or polished concrete.
Floor materials like wood and carpets should be avoided because they easily get dirty and are not durable.
In contrast, floors that are tiled are not only easy to maintain but also look attractive.