Three Ways to Increase Property Values

Real estate investors live and die by their ability to add value. With no added value, there are no profits. This is true with any business, but what makes real estate such a great business and a great investment, is the number of ways you can add value and cash in on big profits. Here are three ways you can add value to your properties.

Upgrades and Repairs: OK, this is the obvious one and is the reason fix and flippers can make money. Some repairs add a lot more value than it costs to do. The more creative you are with the improvements, the more value you can add. For example, I have a client that adds square footage to every house he buys. He really likes the inner city properties because they are the hardest to add square footage. You either need to finish an unfinished basement, or add a second story. There is not typically enough land on the lot to add an addition by increasing the foot print of the property. This client does a lot of basement finishes and “pop tops,” but where he has made the most money is the basement that is only 5 or 6 feet deep. He will go in and dig out the basement to a full 8 or 9 foot height and then finish it. Something most investors would not think of, so he is able to get the deal most other investors pass on. I have also seen some investors find houses that don’t really fit into a neighborhood and they make them fit. This could be limited bedrooms or bathrooms or funky floor plans. All of that can be changed. Obviously many cosmetic fixes like kitchens and bathrooms add a lot of value too. There is a lot more to it than this, but the idea is to buy a property at its true ‘as is’ value, (don’t over pay), and then add value with the repairs and upgrades.

Owner Finance: I love this one because it is so easy to add value with very little to no work. You will need to wait to cash in on your profits, but it is a way to increase a sell price significantly. You can also use this strategy to defer tax gains over a few years, instead of taking a big hit all in one year. When you have a property for sale there are a limited number of buyers for the house, although right now that pool of buyers seems pretty big. If you can increase the pool of buyers, the demand for that one house increases, which forces the price to go up. Someone that cannot qualify for an ordinary loan, limiting the supply of houses to choose from for that buyer, will likely buy your property. That also increases the price. You are adding value by giving them the chance to own a home that they normally would not be able to own. For this value, you should be compensated with a higher price and a decent interest rate on the profits, while you wait for the buyer to refinance and pay you off in full.

Shared Units: This is one area of real estate that I have not dabbled in, but it is extremely inviting. The idea here is to sell your property to multiple buyers. You are seeing this a lot in resort towns. It is always a vacation or second home. Have you ever been to a time share presentation? They are pretty enticing aren’t they? About 13 years ago my ex wife and I were in Florida and got sucked into a time share sales pitch. We decided to go because they offered us free tickets to Disney. We sat there for about an hour and a half and then the hard sale came. They were very good at selling the “idea” of the time share and had my ex wife sold. She asked me to move forward with the deal, but I could not bring myself to do it. I told her that I was not comfortable with an emotional purchase and that we needed time to think it through. “Can I please have our Disney tickets?” was my response. As we rode back to the hotel that afternoon, I started thinking about the math. Each unit can be sold to 52 different people because your purchase only gets you 1 week a year. Add that to the annual maintenance fees and the numbers are staggering. I know people who have flipped time shares successfully, because you can get them for free or near free on Craigslist, but it is not an investment I was interested in. With that said, I have considered doing a half or quarter share on a house in a ski town in Colorado. In this scenario, you are sharing a house with 1 to 3 other people so there is a ton more flexibility. You can use or rent out your weeks and you can be guaranteed valuable high demand weeks every year. It is a way to get a second home without the full expense. From the seller’s point of view, it is a way to get more for the house. ½ a share of a house is going to cost the buyer more than ½ of the fair market value. I have seen business plans from investors that would buy a house and quarter share it out. The idea was that after they improved the property and sold ¾ of the house to 3 different buyers, they would own the last ¼ free and clear. Obviously this strategy will work best in areas where people want second homes. The downside is if there are any improvements or major issues. I can see there being disagreements, so this is something you would want, as a buyer, to work out with all the other owners in writing before you buy.

Advantages of Living in a City

City life is commonly described as fast-paced. It is a life that is tangled with having a busy lifestyle such that every second counts. Despite this scenario, the advantages of living in the city still speak best about why there are still may families who choose to dwell in the urban jungle.

Transport accessibility. Even if you don’t own a car, transportation is relatively easy to take you from one part of the city to another. There are many modes of public transport such as buses, trains, and taxis. There are designated points or stations to where you can ride so looking for them won’t be a problem at all.

Variety in lifestyle spots. If you’re one that is active day and night, then the city is perfectly yours as a playground. From shopping malls, restaurants, entertainment spots, bars, and a lot more – the city is that big to accommodate them all. These establishments are made to lure you more into being a city dweller.

Better opportunities in choosing school institutions. Admit it or not, it is a well-known fact that educational institutions are concentrated in cities. While there are school districts which closely monitors those in other areas, there is still a better opportunity of choosing from many schools when you are in the city. Aside from designated public schools, there are also private schools that can give you more options to where to send your kids. If you’re looking for specialty schools and training schools to enhance your skills or upgrade your knowledge, the city can also offer several options.

More job opportunities. Because a city is where population is usually concentrated, then there is also a tendency that more establishments are constructed. From government offices to private institutions, a city has numerous employers which offer jobs to its residents. whether you’re inclined to government service or your skills is for private firms, you have options to choose from as a city job hunter.

Diverse social interaction. More than the advantages anchored with the presence of lifestyle spots and government offices, city life has more to offer. Social interaction in the city is so diverse. There is variety in culture and religious beliefs. This is attributed to the presence of numerous races and ethnicities within the city particularly those that are classified as metropolitan. Living in the city is one great opportunity of expanding your horizon. After all, making real friends and acquaintances is essential in making one’s life worthwhile and productive.

Highland Park, CA Homes and Real Estate – A Look at the Numbers

In Los Angeles real estate circles, everyone is talking about Highland Park. Like other Northeast LA neighborhoods like Silver Lake, Eagle Rock and Mt. Washington, Highland Park is in a state of gentrification as new stores and restaurants are popping up on York Blvd. and homes are being purchased and restored. As a result, homes in Highland Park are in demand and prices have steadily risen. But gentrification isn’t the only reason. Highland Park is a wonderful area to call home.

Highlan Park is an amiable historic neighborhood located in Northeast Los Angeles. It is a hilly neighborhood located in the San Rafael Hills along the Arroyo Seco. It is southwest of Eagle Rock and Northeast of Cypress Park. People from many ethnic and socioeconomic groups call this neighborhood “home”. The weather is pristine with the highest monthly average temperature being 73 degrees in the hottest month of July and 57 degrees in the coldest month of December. Highland Park experiences light rain; January receives the highest amount at 4.6 inches total. According to Walk Score, Highland Park is the most walkable neighborhood in Los Angeles with a score of 72. It is very accessible and most errands can be completed on foot. It has some public transportation and is somewhat bikeable with a transit score of 47 and a bike score of 53.

According to the 2000 U.S. Census there were 57,566 residents in the 3.42 square miles of neighborhood. That is an average of 16,385 people per square mile. Highland Park is one of the highest density areas in Los Angeles. Highland Park grew to 60,835 people by 2008. The ethnicity break down was as follows: Latinos, 72.4% Whites 11.3%, Asians 11.2%, Blacks 2.4% and others 2.6%. A larger than average 57.8% residents were born abroad. 55.3% of them were born in Mexico and 12% were from El Salvador. In the male population 52.2% were married, 41.2% had never been married, 4.9% had been divorced and 1.6% were widowed. For the women: 50.4% were married, 33.2% were never married, 9.3% were divorced and 7.1% were widowed. The demographic for never married was among the county’s highest. 14.3% of residents who were 25 and above had a four-year degree. This was average for Los Angeles. 45.1% of the residents were born in a foreign city. This was a high number for Los Angeles. 4.9% of people in the population were veterans; this was a low number for Los Angeles. The average age of residents was 28, which is seen as young compared to the other areas of Los Angeles.

The average household income in 2008 was $45,478, which is an average number for Los Angeles. The average household size was 3.3 people, which is 25% higher than the national average. Renters occupied60.9% of housing units, which is 105% higher than the national average. Owners completed the other 39.1%, which is 58% lower than the national average.

Zillow states that Highland Park’s home value index is $662,800, which is up 13.1% since last year and with a projected increase of 4.3% predicted over next year. The market temperature is very hot and ideal for sellers. The average price per square foot is $582, which is higher than the Los Angeles average of $448. The average price of homes is $652,500, which is 123% higher than the national average. The average rent per month is $2,600, being 22% higher than the national average. The current Market Health is 5.3/10, which is relative to other markets across the country. Highland Park will continue to grow and develop.

Because Highland Park is in a stage of gentrification with rising home prices, it is highly advised for homebuyers and home sellers to seek out an experienced Highland Park realtor who specializes in the area.