Not many investors think of incresing the value of a neighborhood to sell their properties for more. This gives you an advantage over them if you use this strategy. Of course, this can be a time-consuming and difficult process.
Often houses sell cheap because of the neighborhood. Raise the value of the neighborhood and you raise the value of any houses you own there. But how do you do that?
How To Improve The Neighborhood
The simplest way to bring up the perceived value of the neighborhood is to simply do what you can with your own property. Many people have noticed that when they clean up their yards and paint their homes and do some landscaping, others soon follow. Whether your example encourages others or makes them ashamed of their own yards, the effect can be a nicer-looking neighborhood with higher property values.
It is worth trying if you have an investment property or your own home to sell. But you don't want to count on this simple strategy if you invest in property with the idea of raising the values in the area. You need a more comprehensive plan for this.
An investor told me how he renovated a neighborhood in Philadelphia. He bought more than half the homes on the two streets he was targeting. Then he fixed them all up nice, and even paid for improvements on one or two homes that weren't his. He lobbied for more police patrols, and started a neighborhood watch program.
Now comes the part I hesitate to mention. It borders on unethical, but the result was a better situation for everyone involved. He used a couple of his companies to buy some of the renovated homes. This was to get some sales at the new higher prices on the books, so the appraisals would come in high enough for banks to finance the properties (appraisers use recent sales in the area to determine value).
The homes were selling for three times what he paid by the time he had sold them all. The neighborhood was revitalized. The new owners maintained the homes, and so the values continued to rise. A nicer safer neighborhood and a lot of profit - not a bad outcome.
Some Other Ways To Increase Value
If you own just a couple properties in the neighborhood, you are limited in how much you can spend to improve the neighborhood. There are some things that dont cost much, however. Here are some suggestions.
If there are any vacant lots that have garbage in them, pay some kids to clean them up. You might have them chop down weeds or mow the grass as well.
If there is an "island" or some kind of common area in the street, plant some flowers and get the grass mowed.
If there are any other properties for sale, encourage the owners to really clean them up. Let them know that you will be doing the same, so all of you may be able to sell more easily at higher prices.
Report any junk cars or other eyesores that violate city ordinances.
If you own enough properties on a given street, you can spend a bit more, maybe even trying things like buying paint for neighbors who agree to paint their homes by a certain date. But even if you have just one property, you can encourage a neighborhood clean-up, start a neighborhood crime watch, and do other inexpensive things that will raise the value of the neighborhood.
