How to Invest In A Shifting Market
There are 2 "must haves" when investing in a shifting market. The first must have is a conservative pricing model. As sales slowly begin to slow down and properties are sitting on the market longer, it becomes critical to not over project after repair values. Don't assume your property will sell at the top of a market. Give yourself a larger margin, to accommodate for the changes in the retail market values.
The second must have is a creative approach for increasing value. If you have find ways to increase the bedroom and bathroom mixes, you can increase your net profit. An accessory dwelling unit (ADU or Granny Flats) gives owners the ability to build rental units on their property. This is a creative way to add livable square feet to a property, as well as potential rental income. Market data is proving that selling a property with two permitted dwelling units on one lot is more valuable than a larger single family, in the same neighborhoods.
Life occurrences happen at any time; wether the market is up or down. Finding opportunities that you can invest in, such as, pre-foreclosure, probate, trust sales, and/or REO properties will average 15-25% below market values.
As we continue to watch the stock market, interest rates, and the real estate markets in Northern California to serve as indicators of a shifting marketing, investors can begin to use creative strategies such as these to stay ahead of the curve.
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