In this week topic we are anatomising the 4th phase of the Property Investment Life Cycle, Renovation.
The previous steps were testing our skills in finding the perfect location, the suitable team for construction and design and our capabilities in long term planning and management.
You can recap all of the previous phases over here:
These phases have led us personally to my favorite part, where the grand vision is finally starting to form a shape. Well, at first it usually comes with plenty of dust and dirt, but as we say; “If you want to build, you gotta destroy first”. Occasionally a site visit could turn into a great team building or stress-relieving program if the builders let you borrow a sledgehammer.
If the renovation of a property is done correctly, it will come with much better facelift’s functionality and changes the overall look of the property, which subsequently increase the property price or rental. Some experts in this area once quoted, “Renovation is like adding the soul into the body". After the United States of America (U.S.) 2007 Credit Crunch Crisis, there are many houses badly maintained and damaged, or abandoned, or urgently need to sell, which can be renovated to livable standards. The facelift given to these distressed properties is intended to resell and match the upgraded specifications for a totally new look that is affordable enough for the home buyers to obtain mortgage loan.
In view of the current lower property prices compared to buying land and building new ones, renovating the shortlisted existing ones for the potential single-family or multi-family houses segment in certain part of the U.S. can certainly give higher capital appreciation and rental yield.
Investment Strategy
The U.S. residential property advertise as of now presents a solid opportunity for investment as house prices are rising from historical lows and the country's overall financial climate proceeds to move forward. The current state of the economy has made an exceptional opportunity within the genuine estate market. With housing costs at bargain levels, the time to purchase is now. One of the best areas to invest in private property is Detroit, Michigan.
Case Study on U.S. Housing Investment
There are numerous property developers or builders in U.S. that gives their administrations in housing investment who specialized in Detroit property markets.
They will first act as a conduit between local bothered property sellers and interested investors who are looking for capital appreciation. As the recuperation within the Metro Detroit marketplace gathered force and the neighborhood rental market reinforced, they will commence a program of restoring and renting out the obtained single-family homes before reselling them as income properties to property investors.
The Metro Detroit domestic owner market is presently appearing huge strength in exchange volumes, reduced days on market with amazing cost appreciation. Meanwhile, the speed of the investors to acquire these single-family homes at distressed costs, and to commence a program of upgrading the homes to a more significant degree and re-selling the homes to local Metro Detroit domestic owners will determine the profitability of the investors.
Renovating isn’t just restoring the house, but it restores new tale and tell for new hope that meet your purpose.
To be continued… Phase 5: Refurbishment
