If you want to crater your property value, the fastest way to do that is probably to allow deferred maintenance to build up.
Yesterday, I visited a place that had quite a few positives for my clients including: Decent land size, interesting home and outbuildings and the right location for these folks (they have family living nearby).
Negatives—it was really icy and the snow was DEEP ☹ However, a few weeks should fix that (I hope). Mind you this is Ottawa, the 2nd coldest capital city in the world; it’s like the giant’s garden (the book is the Selfish Giant, a child’s tale written by Oscar Wilde in 1888), a place where (it seems) it’s always winter…
The surface road accessing the property was in sad shape and there was beaucoup water and ice in one outbuilding.
This property is probably a good option for my clients, but there is a ton of deferred maintenance they would have to tackle (and not just in the building shown above, unfortunately).
Deferred maintenance (like needing a new roof and not doing it) is a big turnoff for clients not to mention what an appraiser will do when they get a look at it.
I suspect that appraised values fall hugely because appraisers, like almost everyone else, are incredibly influenced (in a negative way) by how a property shows.
So, I had a comical thought: You know how there is an SPCA (Society for the Prevention of Cruelty to Animals) in just about every city on the planet? There should be a SPCP (Society for the Prevention of Cruelty to Property) so your house or building can call up the society and ask for help.
Heck, with AI and the IoT (internet of things) burgeoning around us, it might happen!
postscript: for people I coach, canny investors all, the more deferred maintenance, the better. Huh? What’s.that.you.say?
Yep, the more the better. It leads to long DOM (days on market) and a seller more willing to provide better terms and lower price.
Clients of mine bought a townhome owned by a hoarder for $150k below market; another client bought a 24-unit apartment building in small town Ontario for $600k (that’s just $25,000 a door). How come? The owner had left a $10,000 roof leak in the Spring unattended and black mold had practically eaten the building by the end of a very humid summer… nearly all his tenants had left lest the black mold eat their lungs. #TrueStory
Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD
Real Estate Investment and Business coach
ROYAL LePAGE Performance Realty broker
Ottawa Senators founder
-MAKING IMPOSSIBLE POSSIBLE
-FREEDOM VIA REAL ESTATE INVESTMENT AND PB4L, PERSONAL BUSINESS FOR LIFE
-FEHAJ, FOR EVERY HOME A JOB
-MAKE YOUR HOME WORK FOR YOU, INSTEAD OF YOU WORKING FOR IT
-HIGHER ROI NOT JUST FOR OWNERS AND INVESTORS, BUT FOR TENANTS, GUESTS, VISITORS, NEIGHBORHOODS, COMMUNITIES, TOWNS, VILLAGES, AND CITIES TOO
Feature image by: https://commons.wikimedia.org/w/index.php?curid=530827