Adding value to both the asset and the community at large helps increase the value of your asset. This can have a dramatic and positive impact on your bottom line, and it makes you, as an investor, an asset to your corner of the world. Using Renovations to Improve Cap Rates and Property Value
My book, Backstage Guide To Real Estate chronicles my adventures going from an actor to a full-time real estate investor, sharing the 18 keystone concepts that I learned along the way. Keystone Concept #4 is all about adding value. With this strategy, you purchase an asset that is not at its best and highest use and then improve it. Maybe it’s a property that was built 30 to 40 years ago and hasn’t been updated since. Often, value can be added by doing upgrades to unit interiors, such as putting in new appliance packages, new paint, or new flooring. You can also make improvements to common areas like hallways and lobbies. Perhaps you can
add some amenities to the property, for instance, a dog park or new pool furniture. These types of improvements really add up in terms of increased value while substantially improving the quality of life for the folks who live there. These are the type of win-win deals that I love.
OFTEN, VALUE CAN BE ADDED BY DOING UPGRADES TO UNIT INTERIORS, SUCH AS PUTTING IN NEW APPLIANCE PACKAGES, NEW PAINT, OR NEW FLOORING.
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