It’s common to spot in some quarters of town or in housing estates some old, dilapidated and abandoned buildings. Some due to urban decay while others as a result of negligence. While investing in real estate, a lot of people assume that it is enough to complete the building and then milk it dry. Even though it is true that most buildings are designed to serve purpose for a certain number of years, it is also true that if managed prudently the lifetime of a building can be extended much longer. Much like a cow. Developers and homeowners need to consider certain investment safeguards even as they plan to enjoy the benefits from their investments.
The result for homeowners is the preservation of property value which can ensure a higher resale price, and for investors it is more income for much longer and also, a higher resale value compared to when they are neglected. Better still preserving the value of your property helps other properties in the neighbourhood to preserve their value and keep the location attractive which in turn helps to increase the value of your property. That, from a purely rent seeking point of view, is free gold. Of course the social as well as the environmental advantages are equally appealing.
So here are a few things you could do to improve the value of your real estate investments:
A major reason for the neglect of repair and maintenance on buildings is the lack of cash to carry out the necessary. This results from a lack of planning. Any investor at the onset, and in keeping with the principles of sound investment, ought to set aside a certain portion of the rent accruing from the property for the purpose of future repairs and maintenance.
The lure of leafy suburbs is a confirmation of the dominating preference that humans have for the natural over the artificial or synthetic. Trees purposely planted at the beginning of a real estate project could make the location very attractive in a period of 10 years when the owner may opt to sell the property because natural places are in short demand. Furthermore, tree seedlings are easily affordable. In fact integrating trees, grass and flowers into the property would do you more financial good.
The value of many properties have been depreciated by the activities of those in the neighbourhood. It is an unforgivable mistake to underestimate the consequences of one dilapidated piece of property on the value of adjacent ones. It is more prudent to favourably engage neighbours on the maintenance and upkeep of their property in order to preserve the value of your own. In addition, avenues could be created that address the handling of utilities that preserve the common good.
Especially for commercial properties, investors may increase the appeal and value of the premises by providing ample parking for would be tenants. It is even better to have a little of parking space or to have none at all. No client appreciates the burden of paying for a separate parking lot and they would rather go for the next available alternative with a parking lot.
It is good practice to monitor the property so as to take note of areas that need repairs. Often times most defects will cost much less if they are detected early enough and renovations done. The reason why many property owners spend much is because they because they neglect carrying out renovations until the defects have spread to other parts of the building.
In concluding, land markets just like capital markets are affected by among other factors, confidence. Buyers tend to hold back when they don’t feel confident of getting value for their money. To maintain confidence, one of the things that sellers have to do involves preserving the value of their properties in ways that are perceptible to the buyer.