Ask James Dainard
Q&A With a Local Expert in Real Estate Investing
“My house has been sitting on the market, what can I do to up the value without making significant changes to my home?”– Matt of Auburn, WA
Typically when a house is sitting on the market the problem is the price. But if you don’t want to drop the price dramatically, there are some fairly inexpensive changes you can make. One quick fix is landscape clean up. Make sure your yard looks pristine. You could even do it yourself and spend a few hours cleaning up your yard. Clean out all the dead leaves, weeds, and trimmings with a rake. Also, make sure to edge your flower beds. You could also add a couple of accent walls with fresh paint. I would recommend going on Sherwin Williams’ website and checking out the hottest trend colors. If you already have your own accent walls, verify that the colors are in line with current trends. Another problem I see frequently is people have too much personal flavor in their home. For example, if the kids’ rooms are painted bold or bright colors I recommend changing them back to neutral. You should also remove the clutter from your home. Nothing is worse than walking into a messy home. If your house is vacant, you can stage the property so buyers can imagine living there. Depending on the season, there are also some seasonal changes you can make to your home. Let’s say it’s summer season, you could install a small patio outside. Add pavers for $3 apiece and maybe a chair or two. That way people can envision spending time there in the summer. Every season is different. Aside from price, the small changes can make a big difference in the selling of your home.
“What do you look for when you are buying an investment property?” – Kaitlyn of Seattle, WA
Great question! I look at what my highest cash on cash return is. Many people mix up cash on cash return and profit. Profit is relevant, but it is a by-product. To keep it simple, I look at how much money I have to put into the property and how much money I am getting out of it. I also like to consider how fast I can flip the property. The goal as an investor is to make your highest annual cash on cash return. Whether the profit is $5,000 or $50,000 it really just depends on how much money I have to put into the deal. Say I could put $3,000 into the project in order to make $5,000 or I could put $500,000 in to make $50,000 I am going to choose the deal that I only have to put $3,000 into. Significant profit doesn’t always equal a good deal. Some deals take longer than others, and maybe you’re making a lot of money but you also had to deploy a lot of money, and you won’t get that money back until the deal is closed.
“What can I do before I list my home to make it most appealing on the market?” – Anthony of Bothell, WA
Before you list your property you should talk to your broker about who they think the target buyer is going to be. Each home is different and depending on the size and location of your house you want to make choices that are targeted towards the audience that is likely to purchase it. For instance, if you are selling a smaller house in Seattle, your target buyer will likely be a first time home buyer. After determining your target buyer you should choose a style that fits that demographic. First time home buyers are typically young, and young people tend to like the modern style. You would then choose modern colors, fixtures, and upgrades to get the most profit. Say you have a traditional house on the Eastside. You would want to go for traditional upgrades and a cleaner style rather than a modern style. The key point to consider is it is not really about what you do to the house, it is about what you do to target the demographic that is likely to buy the house.
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