Real estate is not a game for the faint-hearted. Even so, numerous examples of investors have found their way to fortunes in the industry. Real estate has many risks and uncertainties involved. Whether you are buying or reselling, you have to invest a considerable amount. Thus you must make sure your investment makes a profit or at least save yourself from loss. There are many opportunities in the Residential Real Estate industry, but that does not mean that anyone can make a fortune off investing in real estate. You need to know a lot before buying or selling Residential real estate property, among them repositioning and identifying from where to buy.
Top business man, Kosi Stobbs, is killing the real estate game. He is the owner and CEO of a group of companies that does over 25 million in revenue, owns over 20 residential and commercial properties and is looking to acquire more to become Canada’s first black billionaire. Stobbs has over 50 million in assets. He has not earned all that by luck. Below is his take on repositioning residential real estate and knowing where to buy residential real estate.
Repositioning Residential Real Estate
Repositioning is all about adding value to an asset, well, in this case, a residential property. While putting up a property on sale, you want to make the most money out of the property. Most people would probably go for selling a shabby house in the same state, but as an investor, repositioning and then selling is the more profitable option. By repositioning a property, you attract tenants or buyers with more disposable income. That means that they may be willing to pay more for the property. You can increase the price or even add more income streams from the same property, thus getting the most out of it. Here is how repositioning a Residential Real Estate works:
Improving the Physical Appearance
The property has to look good to sell for a reasonable price. You have to make the potential customer willing to pay more. To do so, address factors like painting, new exterior, and interior finishes, landscaping, resurfacing the parking lot, and more. An old-looking property will only attract buyers willing to spend the least amount of money. By doing the small changes, you get justification to increase rent.
Here you change how the property is operating. Change the manager or the management company handling the place, do away with non-complying tenants, increase occupancy, or even setting up laundry rentals. Doing so will increase the efficiency at which everything runs, and thus bring in more money.
The General Attitude Around of the Property
As opposed to making cosmetic changes to a property, here, a lot is involved and thus more expensive. It is common knowledge that you have to spend more to get more. It might be the most costly of the three repositioning aspects, but it is the most disruptive and can highly appreciate the worth of a property. Changing the attitude in a property will require actions like adding a pool, a gym, making a deck, changing mechanical systems, property layout, and more.
Knowing Where to Buy Residential Real Estate
There’s a lot you can look at in different markets to know where to take your investment. Some markets might get driven by people coming for vacations, others by lack of available housing. However, from an investor’s perspective, the key to protecting your income is following the jobs.
A thriving job market correlates to a flourishing real estate market. On the other hand, a depressed job market connects to a depressed real estate market. It makes sense that only people with jobs and making good money will afford proper housing.
As an investor who is looking to acquire some residential real estate property, here’s how you know the best place to buy your next property:
Diversity of Jobs
How it works is that if an area has one mill, it has a great chance to suffer if say the mill shuts down. That will cause the value of property to topple. If an area has various job sectors and or the economy is supporting a large population, it has a higher chance to withstand an economic crisis; thus, the property does not lose value and market.
Buy Low Sell High
It equates to the wages of the area compared to the values of the properties, as a ratio. If the salaries don’t support the cost, it doesn’t necessarily mean it will crash, but it is at a much higher risk to do so.
All the wealthiest people on earth have this one thing in common; they have investments in real estate. The industry is a goldmine, but only those with the right strategy stand a chance to achieve success in the uncertain market.