| Look Past the Bottom Line for a Property's | | | | areas, like Williamsburg, Virginia, taxes |
| Potential | | | | have increased 15-13%. Tax base increases are |
| | | | linked to improved property value. |
| It's unfortunate that many real estate | | | | |
| investors tend to look at the bottom line | | | | If your investment property venture is a |
| when deliberating about a property, rather | | | | legitimate business, contact the local |
| than the big picture. The real moneymakers in | | | | Chamber of Commerce and county government to |
| real estate investments are the people with | | | | see if there are special funds available for |
| vision, who think creatively, and are willing | | | | revitalization projects. Most Chamber of |
| to assume some level of risk. | | | | Commerces provide such programs as well as |
| | | | classes where investors learn how to access |
| A client's initial line of questioning about | | | | these funds. |
| an investment property goes something like | | | | |
| this: What has the property's revenue been | | | | There are lots of great examples of |
| for the past three years? How much money will | | | | properties with potential. I'd like to share |
| they make starting out? and, How much will | | | | some background about one of my own listings, |
| they have to invest in the property in the | | | | a motel in Williamsburg that has not been |
| beginning? These are all valid questions. | | | | open for three years. The owners do not know |
| After asking and answering them, investors | | | | when it was built - probably in the 50s or |
| might try taking off the blinders and | | | | 60s. The motel sits on 2 1/3 acres of land, |
| thinking outside of the box. | | | | which is all zoned commercially. The motel is |
| | | | situated right on a main thoroughfare that |
| Our population is growing, and land -- unlike | | | | was once called "The Golden Mile" of |
| cars, furniture, or other structures -- | | | | Williamsburg. It's geographic location is |
| cannot be remade. | | | | near York County a phenomenal leader in |
| | | | economic development. York County is enticing |
| Real estate investors might ask themselves | | | | businesses by zoning the northern section of |
| these simple questions: | | | | town commercial and it will be the site of |
| | | | the new hospital complex that is currently |
| 1. Is there growth in the area where the | | | | housed in Williamsburg. |
| property is located? Is there anywhere for | | | | |
| the growth to go? If so, is it headed towards | | | | Thinking Outside the Box |
| your property's location? | | | | |
| | | | An important fact is not widely known about |
| 2.Has the city or county zoned the are for | | | | the motel's location, which is key to its |
| revitilization or economic development? If | | | | investment potential. One mile from the motel |
| so, are there any special funds or benefits | | | | property, across from the Williamsburg |
| available? | | | | Pottery, a gated senior community with full |
| | | | amenities (golf courses, recreation center, |
| 3.Is the property accessible to public | | | | pool) will break ground in April 2004. The |
| transportation? | | | | Fortune 500 Company behind the building of |
| | | | this project is set to build 3,000 homes, |
| 4.Are people beginning to look for homes in | | | | with an estimated completion date of 2006. |
| this area? If so, investors want to be | | | | Scanning the area, it is obvious there are no |
| looking far in advance of others to secure | | | | European Bakeries, international shops, or |
| the best property deals. | | | | stores and eateries which deliver (drug |
| | | | stores, groceries, take out, etc.). A strip |
| 5.Is the property value in the neighborhood | | | | mall with leasing options for different |
| in a slump or an upswing? Purchase during a | | | | businesses, or even an extended stay hotel |
| slump for maximum profits. | | | | could be built on this land, and run for a |
| | | | profit. Investors I have shown the property |
| The truth is, an investor not make a profit | | | | to are wary of the $1,000,000 price tag on |
| from the property for the first two years. | | | | the motel. In the coming years this price |
| Investment property owners should be looking | | | | will seem like a steal for commercial |
| at the long-term, because they may make money | | | | property in the area. |
| over the next 15 years, while others are not. | | | | |
| | | | There are many other examples of properties |
| Do your research, or hire a REALTOR who is | | | | whose potential have not yet been discovered. |
| motivated to do it correctly. Speak to | | | | Remember, once you land that investment |
| neighbors to understand the benefits of | | | | property of your dreams, make sure you have a |
| living there. Look at the neighborhood | | | | marketing plan, which includes a decent web |
| surrounding the area, and try to determine if | | | | site, to launch your business. When |
| those homes have increased in value. For a | | | | speculating, trust your creativity and |
| solid indicator, consider county property tax | | | | vision, and rely upon the expertise of a |
| figures. In some areas you will find a slight | | | | REALTOR who knows the area, and shares your |
| increase in the tax base of 1-3%. In other | | | | vision. |