Looking to invest in real estate? Don’t stop at just standard housing and housing units. You could also be considering land with a lot of development potential, and homes that just need some TLC. Both offer excellent value opportunities. Keep in mind, there are certain characteristics that you should be looking for, and others that you should try to avoid.
- Land Features
- Cosmetic Issues
- Poorly Showcased Homes
Land Features
Certain lots will age better because of the location, ambiance or view. Others may have more developmental potential with acreage and zoning. Homes on properties like these are more likely to yield a greater appreciation and worth considering for investment savvy buyers. Vacant lots or lots with homes that might need to be demolished or majorly upgraded can be great opportunities. These offer the potential for increasing density, upgrading the home’s footprint and maximizing the value of any remodeling. If a full scale build or reno isn’t appetizing, it’s worth considering homes on special or standout lots (even if they need a little TLC). These homes will continue to appreciate in value more than the average comparable home and will allow for future development possibilities.
What to look for:
- Beautiful views
- Increased lot size (larger than typical for the area)
- Proximity to parks, good schools, waterfront, transit/highway and other amenities
- Privacy (tree coverage, landscape details that provide cover or separation, etc.)
- Double lots that have the possibility for development (by you or in the future)
- Parking development for the area
- Backing onto or close to ravines, trails and other natural spaces
What to avoid:
- Major routes or busy streets
- Powerlines
- Highways/loud transit/traffic
- Large factories/businesses
What to consider:
- future development plans for the area (residential and commercial)
- future transit development
- changes to schools, parks or other diresable area or property features
- future proposed zoning changes
(*you can’t always know what’s coming but do as much research and recon as you can to work with the best information available at the time)
Cosmetic Issues
Another opportunity for real estate investment involves looking past homes with cosmetic issues. Homes that just need a little love are particularly attractive if you’re looking for a below-market-value opportunity. Don’t miss out on a beautiful home that could just be covered up by outdated wallpaper, off-putting paint colours, furnishings that are not fit for the space, or decor that is simply not to your taste.
Your real estate agent should help you see why a home is more desirable than you may think. The space may just need a fresh coat of paint, some landscaping, new eavestroughs, a driveway resurface, and/or some new lights. And in terms of value, you’re better off making those updates yourself rather than the sellers. Remember that the home could check all of your boxes, you just can’t see it because of the acid green walls!
Conversely, if you’re just looking for a turnkey move-in-ready property with well-suited finishes, that’s okay too! Just be aware that these properties typically sell at a premium. Since these homes are ready upon sale and no modifications are required prior to moving in, they appeal to the largest buyer pool.
Poorly Showcased Homes
There are some homes out there that just haven’t had the right touch. How many times have you looked at a listing on MLS and been turned-off by the second photo? These homes often have suffered from bad or no staging, unflattering photography, or the listing is simply incomplete.
Be on the lookout for these homes. Have they been on the market longer than they should? Is there a lack of interest? Can you see the potential that others may be ignoring because of the marketing? Properties with minimal attention will have decreased competition and thus a chance you can get a better price.
Looking for a new real estate opportunity? I’m here to help! Let’s chat.
Photo by April Barber on Unsplash
