Some are under the impression properties will increase in value simply by buying and holding. Historically property values do increase over time with appreciation, but this is not always the case. The truth is, your property is in a constant state of depreciation. As with any physical asset you own, whether it be a car or home, normal “wear and tear” will decrease the item’s value. This is why it is so important to preserve your asset and add value if you are able.
When it comes to real estate, land will typically hold its value and cannot be depreciated. During the great recession, land values did not go down as much as commercial buildings or homes. Structural issues, sewage problems, weather and fire damage will all decrease the amount of what your property is worth. Thankfully, we have insurance for some of these occurances. On a lighter note, let’s discuss different ways to not only preserve your property’s value but also boost its potential price.
Just like going in for a regular check-up with your doctor, having your property inspected on a consistent basis is a good idea. Especially those expensive repairs like a roof, HVAC, plumbing and electrical systems and Beacon has contacts who are ready to assist. Some do not think to have these checked out, which can result in costly repairs. Cosmetic improvements and also renovations that expand square-footage or add to aesthetics can be an easy, more affordable ways to increase a property’s value, but we’re only scratching the surface.
When referring to commercial properties, doing your due diligence or having a broker with the expertise, is the most important component from a time and cost perspective. Repairs, renovations, reconfiguring space, building additions, subdividing, rezoning and vacancy lease-ups are many other ways to increase not just the value of your property but also its cash flow. (We will discuss further in another blog of different ways to turn your property into generating income or strengthen the returns on your investment.)
Beacon is here to offer competence in advising you on what the next steps to take and work side-by-side with you helping you take care of your property.
Please don’t hesitate to reach out as we’re available to help with any of your real estate needs.
Beacon Real Estate Services
Commercial Broker Associate