Avatar's Blog
» Waht Constitutes Improvements to a Property?
In the last post, I discussed the street value vs appraised value of real esate properties. If you put in substantial amounts of money and/or work into a property, it may not be necessary to wait for a year to see an increase in the value of your property in the eyes of hard money lenders.
If you purchase a commercial office building for $1,000,000 and immediately paint the interior, carpet the floors and rent out the erstwhile vacant building, within a few months, you may have a significant increase in the value of the property. The bulk of the increase in the value of the property will lie, not in the actual dollars spent on pain and carpets, etc., but in the income stream generated from the fact that you have successfully rented out the building. Get solidly written, long leases (3yrs +) in place and the value of that run-down empty building can be worth a whole lot more in just a few weeks' time.
