Apartment Redevelopment: Which Properties are Primed for Profit?
Investors looking for high returns in urban markets are wise to consider apartment redevelopment. State and local ordinances can be difficult to navigate, and the process may quickly become complex, so it is essential to partner with an experienced real estate developer who has a feel for which properties are most likely to pay off. Of course, every promise of a lucrative return comes with risk, but some factors can tip the odds in your favor.
Naturally, when you think of real estate, location is the primary factor. Old buildings by new amenities are prime candidates for redevelopment. For example, Steven Taylor Landlord believes the Los Angeles area’s improved Metro line will help revitalize parts of the city, making the properties within a block of the new stops exceptionally desirable and therefore extremely valuable. Rezoning of nearby neighborhoods can also result in increased desirability; renters may not want to live right next to a crowded shopping center but they will certainly enjoy the convenience of being within a few blocks of their favorite stores.
Lengthy vacancies or neglected properties often result in the opportunity for redevelopment; sometimes whole neighborhoods benefit from rehabilitation. Older buildings may need to be brought up to building codes for safety or compliance with the Americans with Disabilities Act. Furthermore, redevelopment often results in the repurposing of some spaces, adding community centers, retail space or other features that make a more comfortable living environment.
Price is to investment what location is to real estate, so it is obvious that you need to search for assets that leave substantial room for profit. You can never be sure of the future so it is impossible to know what a given property may sell for but the one thing you do know is the purchase price. Negotiate wisely and you can insulate yourself and fellow investors from some degree of uncertainty. In real estate the profit is realized during the sale, but it is made possible when you are negotiating the purchase.