A real estate professional or investor can have a ton of fresh research, but the big question is how they utilize it. Another example is the latest data on the number of luxury homes purchased in certain parts of the country over the past year.
Locations like Orange County CA, Palm Beach FL, and Manhattan (NYC) continue to perform well in luxury sales, with Dallas TX leading the way of a surge in Texas luxury buying.
There are several ways real estate investors can make this data actionable. However, investors that do not have a research person or team may be adding to the risk of deciding. Targeting a location with a recent increase in luxury sales does not necessarily reflect that the demand level is still high. Additional research would help in terms of monitoring the continuing demand, or lack thereof.
If and when the demand appears to be strong, there are choices and decisions ahead. At the moment, new builds may face added challenges with supply chain issues and rising costs adding to the risk. Instead of new builds, it might be worth considering upgrading existing homes to make them more valuable. An example is how some multi-family owners renovate while getting rid of lower rent tenants to be able to generate higher paying tenants upon adding new and more valuable amenities.
Taking a similar formula for single-family, an investor or owner of a home would do well to compare amenities with some nearby homes which are now worth $1,000,000 or more. If there is a way to, for example, spend less than $50,000 to give an $800,000 home the look and feel of a million dollar one, you would have an opportunity for success.
Researching to find existing opportunities vs. looking for a new build should be another option for investors to consider. Agents and brokers should also be looking for opportunities for potential sellers along with investors in their databases.
Although it is possible that what you have been doing has always worked, you might be missing out by not exploring additional possibilities. I’m happy to help you and your team to uncover new opportunities!
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