“Appreciation” Goes A Long Way…
Wednesday Feb 22nd, 2023
Have you heard about this term?
To buy a property that has some room for improvement and invest a bit to increase its value is called value added property.
This’s one the most effective ways for both, a novice or an experienced investor, to look out for properties that require some changes. And make those necessary changes.
These properties generate opportunities for investors to take advantage of forced appreciation.
With forced appreciation, investors can generate more rent per unit. Hence, the annual rental income is directly improved.
This increase in income will lead to a total increase in operating income. The purchasing rate is calculated by dividing the NOI by the cap rate.
Note that it’s just a short-term appreciation that adds value to the property.
And if the property is selected strategically where the property value will appreciate over time, then the investor could be able to reap the natural and forced appreciation advantage.
This investment strategy is the key to generational wealth and long-term continuance of an income stream.
Look how simple this forced appreciation and value added thing can be – You just need to be strategic and the gains are all yours.
Sade Sanni, Broker of Record.
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