What’s the best way to add significant value to single-family properties?
Some people might say that remodeling is the answer, but in reality, it’s all about the comparables. As a value investor, you need to be well-versed in comparing your property to others in your area and finding creative ways to add specific value to supercharge your returns. But it can be tough to determine what a property could be worth, and lacking that knowledge can mean you are leaving $$$ on the table.
In a competitive market, it can be tough to find high upside value-add properties. But if you know how to compare property comps, you will be one step ahead of the game and in a much better position to spot hidden value. In this episode, Matt Graves shares his tips and strategies when it comes to “running” comps and finding value in single family investing!
Here are some power takeaways from today’s conversation:
[04:33] Doing Market Comparables
Comps are sold houses in the same general area of the property you are looking at. When doing comps, stick to the same neighborhood and go off the same square footage of your property. Check the MLS to view new sales and comps. Ideally, you should look for comps that are within three to six months.
[10:51] Seeing Value in a Property
They purchased a 1300-square foot property. Their stager lived right next door to the property and they got information about the renovations and quality of their house. Thus, they knew what to do with the property they had bought. There is no better comp than the house right next to your property.
[17:03] Assessing Rental Comps
Use platforms to find out the price, area, and similar properties for rental comps, such as:
Finishes come down to what kind of appliances and furniture you have in the property. For rentals, focus more on kitchens and bathrooms. Putting stainless steel could give you an edge. But do not overdo it and spend only what you need.
[24:04] Connecting to the Right People
If this is your first rental or flip, talk to a realtor to learn. Property managers are a good source as well, as they deal with properties on a daily basis.
[3:29] “You can’t really figure out if it’s a good deal or not if you don’t know what the property is going to be worth after you’ve done your business plan.”
[10:22] “It’s all about seeing value in places that other people might not or other investors might not.”
[15:36] “You have to sort of see opportunity when it presents itself to you. And a lot of times, that opportunity is not the same opportunity that other investors are seeing.”
[23:09] “In some cases, there are fantastic comps. You have to sort of get really creative with the value of these properties and what you think they will be.”