There are three things that I immediately look for in a piece of property; price, terms and appeal. Is the acquisition price fair for current market conditions? Are you paying on the low, middle or upper end for the neighborhood? Terms-are there any particular terms that the seller is willing to provide the buyer? Today, we have “built in terms” with the interest rates the institutional lenders are offering. The current interest rates are still extremely attractive. Interest rates are still well below what they have been over recent history. Appeal can bring into account the amenities that a property possesses, such as bedrooms, bathroom and floor plan, etc…However; appeal can be much more than this. Potential appeal-what can be done to increase the property’s current value? You have heard the term “curb appeal”. How does the property look from the street? There are a lot of little things that can be done relatively inexpensively to increase the overall look or appeal of a property. Highest and best use – is there anything you can do with the property to increase the value of its use? Appeal also is directly associated with the property location. As we all know property location can be the most valuable component of all.
Sometimes a person has a particular image of what they expect the home to be, and it often is unrealistic, or they try to save more on their down payment when they should purchase the most they can afford now. When I first meet with people and they talk about buying a home or income property, they often are describing the size of the bedrooms, the number of bathrooms, the storage space, north, south exposure etc… I don’t want to minimize the importance of such amenities, however, just the acquisition is often more important.
I feel that if a person tries to focus on price, terms, and appeal rather than having a set vision of what the property should look like, the buyer will make a better long-term investment.
The Bay area, particularly the peninsula, is one of the most desirable places in the United States and the world to live and invest. It has everything anyone could want; culture, countryside, ideal weather, great business opportunities, diversified employment, and a limited supply of dirt and thus, properties. This causes one of the most delightful of all economic outcomes: you can make a lot of money simply by investing in local real estate. In fact, there is a better chance of accumulating wealth here than virtually anywhere else in the world.
Eric Ruxton and Larry Aikins are the owners of Terrace Realty Inc. and Terrace Associates, Inc. in Redwood City. Terrace has been in business for over 60 years and in addition to being an independent Brokerage Company, also owns and operates rental properties.
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