A research client of mine was recently concerned about whether or not they should keep a successful rental property because of its age. The concern was that the building may lose value in the next few years because of maintenance, especially in comparison to newer buildings.
Upon researching the neighborhood, it seems that the majority of the surrounding buildings, many of which are rentals, were also built in the early 80s and are in similar condition. The next step is to consider the status of the neighborhood overall. In this instance, the municipality had just received millions of infrastructure improvement dollars.
What my client has is another example of why performing thorough research makes a huge difference toward important real estate decisions. They were seriously considering selling before they approached First In.A review of the infrastructure improvements showed that the bus stop one-half block from the rental was about to be upgraded to a new and covered terminal. The building is located five minutes from a college and closer to a business district. That tells us it will continue to be a solid rental, especially when surrounded with similar buildings.
If the client had gone ahead and sold without the research, chances are they would have lost out on continued cash-flowing rental income and the benefits which go along with it. It is hard to say whether or not the funds from a sale would have turned into as steady of an opportunity.
The client is “now” keeping the property in tact, and will soon be using some of the cash flow toward expanding their portfolio. However, the point is that they initially thought they had made a transactional decision without having performed thorough research. The time to reach out to First In should have been weeks earlier, when they began to worry about the impact of an aging property.
I’m going to share a research source, which provides a “typical” range of the age of homes built prior to 2008.
https://public.tableau.com/app/profile/national.association.of.realtors/viz/Age_Homes/Dashboard1
The more you know about the neighborhood and what is (or isn’t) happening in the surrounding area, the better the decision(s) you CAN make. We are here to help make you FIRST IN on the right information for the best real estate and business decisions!
