With the real estate market heating up, there is suddenly a lot of competition between real estate investors to get the right property under contract for the right price. With that in mind, today we are going to look at some important points with regards to resale value that can be easily overlooked.
Perhaps the most important point to consider when looking for a property that will have a great resale value is the location. Location is key with regards to real estate, and a few guidelines can go a long way. Of course the neighborhood makes a big difference, but when comparing comps within the same neighborhood, small location differences will matter.
Properties located next to busy streets and areas of heavy traffic are going to be less favorable. In addition, properties located at the midpoint of a T intersection will be less desirable, especially if the street that forms the perpendicular is busy. Another consideration is the properties immediately surrounding the subject property. Being next door to a poorly maintained home or an eyesore is going to harm your resale value.
Next we look at bedroom and bathroom count. Having at least three bedrooms and two bathrooms is typically a good rule of thumb. There are areas where this is not the case, for example many senior communities have high demand for two bedroom properties, but generally speaking at least having a 3/2 is going to give you a larger pool of buyers.
Expanding on this idea, properties that have at least two bathrooms are much more desirable than those with only one. This is especially true with regards to homes having 3 or more bedrooms. A side note to this pertains to a master bathroom. Having a master bathroom is almost always going to add resale value.
Storage space is another area that can be overlooked when getting into a property you intend to flip. That is not true when you are talking about buyers who want to live in the property, however. Lots of storage space, large closets and a walk in closet in the master bedroom are all good things to look for. Having a great home with no storage space could make the property more difficult to sell.
In addition, paying attention to the layout with regards to the garage and laundry room is important. Having a separate space for laundry is something many buyers look for, as well as having a two car garage with easy access to the home.
Finally I want to talk about curb appeal. If you are intending to rehab a home, you may purchase it with poor curb appeal, but before putting it back on the market you need to make sure it looks great from the front. The yard, pathways and landscaping should look neat and clean. Having some outdoor lighting is a nice touch in case potential buyers drive by after dark. Exterior paint and attention to the front door are also details that can give a buyer a great first impression that carries through to a closed sale.
Many of these are factors that won’t show up when just looking at comps where you can sort by square footage, bedroom/bathroom count and neighborhood, but they are factors that will matter when you resell the property and are items you should consider when looking for your next deal.
I specialize in hard money loans for California properties, and have lending programs for real estate investors, including loans based on the after repair value and short term interest only loans for up to 75% of the purchase price. Give me a call if you would like to discuss the options I can provide for you.
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