Adding Value to your Real Estate: No Contractor Required
Many property owners are always looking for ways to increase the value of their real estate without completing major renovations. Here are five ways property owners can increase the worth of their property without hiring a professional contractor.
1. Increase the rent
Multifamily properties are prime candidates for easily increasing value by increasing the rent. If the rental income is lower than desired, a minor increase can add considerable value to the property, especially if market rents are on the rise in a particular region. A minor rent increase in the amount of $25 per month on a 4-6 unit property could contribute an additional income of $1,200 – $1,800 per year.
2. Go green
Saving energy can make any property more desirable, thus increasing the value of the real estate. Installing energy efficient appliances and lighting are just a few examples regarding this issue. The demand for solar and wind energy sources is another form of clean energy that consumers and business alike deem important. Solar panels or wind turbines connected to the property provide an opportunity for a higher listing price. Energy saving isn’t the only thing that counts here – as having to take eco-styling under consideration will allow for the selling of an ecological property. This will then attract more environmentally cautious buyers that are willing to pay that higher price based on their needs.
3. Take advantage of tax abatements
If a property owner has commercial property in their portfolio that is valued for $5,000,000, then selling at a capitalization rate of 7%, in a municipality with a tax rate of 2%, you are gaining over a million dollars in reduced assessed value. When using the loaded cap rate which incorporates the market and municipality rate for calculating the assessed value; it is assumed property taxes are not used as an expense for calculating net operating income (NOI). Assessors commonly use the loaded cap rate to derive value for income producing properties like office buildings and retail strip malls; which are relevant to this scenario. So having lower taxes on a commercial property will make it more desirable if and when a sale occurs.
4. Eradicate the odors
Having pets or tobacco use in the property is the right of the property; though not all potential buyers need to be reminded of their presence. Property owners need to be aware that pet, tobacco, and food smells tend to linger. It is imperative to properly clean the carpets, floors, and furniture, and do what is necessary to remove those odors; even if a professional cleaning service is required.
5. Plant a tree
When property owners are thinking about selling their piece of real estate it is important to understand the market and time frame it takes to complete the transaction. Planning for the future with a landscaping enhancement that will mature over time is a great idea. Plant shade trees — not only do mature trees add a level of desirability to your home, but a completely grown, correctly placed tree can minimize cooling cost.
It can be overwhelming for many property owners to understand valuation and how it affects their property taxes and real estate transactions. Utilizing the professional assistance from Allobar Strategies provides property owner the knowledge of how to manage their property more efficiently. Their qualified and experienced tax consultants will guide you through every
step of the way, and also help prevent any tax discrepancies.