The price of real estate continues to increase, the prices for both single family homes and multifamily have skyrocketed. Rents are at an all time high, as we slowly recover from the Pandemic. Prices for
real estate have increased throughout the United States and the world. It is an amazing time to be involved in this business. Since prices are up everywhere, and you're asking yourself should I continue to buy? Commercial is rebounding, what about investing in commercial properties? There is a lot of growth in the Sun Belt, how about the Pacific Northwest? Wait a second, you feel a little uncertain, and perhaps these prices won't last and just as important, you need more money to invest than ever before. I have a potential solution...
LRS Realty & Management can help. What if instead of buying another property, you created value in the properties you currently own.
First of all, we can all agree that fixing up a property to achieve the maximum rent will increase your cash flow, attract good qualified residents and in the long run save you lots of money. Have you considered adding an ADU? We are currently leasing and managing several single family homes and apartment buildings that have ADU's. But wait, it's not as simple as just putting up an attached or separate structure. The purpose is to increase the value of the property, not just add an income producing unit. If I add another unit and rent it out, aren't I creating more income and therefore creating value? Not as much as you think.
Single family homes: Adding one or two units will bring in more income, but it will also bring in "rent control". Rent control, with the best of intentions, has not worked for the average investor. Far too many rules and regulations that are constantly changing. Further by adding additional units you are not necessarily creating as much value as you would if you did a remodel and added, say 400 sq ft to your home.
Adding definition: If you're building an ADU alongside a single family home, build it in a way to create definition. Meaning, you need to have enough space to create a positive environment that will give the residents the privacy needed to keep the single family home feel. Space that belongs in the leasehold of the tenants that live there. A backyard, a patio, a place on the property that is there's alone. An area where they can plant flowers, work on their hobbies, such as painting, a place to sit and enjoy the day. The homes with definition and quality will always bring a higher rent creating value.
