Robyn Seymour - How to Increase the Value of a Purchased Property

Once you have decided to purchase a property and to increase its value, if you want to succeed in real estate investment, you must have good knowledge about finding the right property to buy and what you do to it after you buy it. Every property has "changeables" and "unchangeables" variable. A changeable is something you can change economically, like walls which need paint. An unchangeable is something you either cannot change at all, like location.

There are four possible combinations of changeables and unchangeables: Good changeables-bad unchangeables, Good changeables-good unchangeables, Bad changeables-bad unchangeables, and Bad changeables-good unchangeables

To make a decent return on real estate investment, you do not want to buy a good-good property. It has no unrealized potential and no upside. However, you do want to sell good-good property. They are the most popular and the most valuable. You should never buy numbers 1 and 3. An example of property 1 might be a "clean" slum property. An example of 3 would be a "dirty" slum property with a bad foundation. You can clean it up cheaply but when you're done, it's still slum. No sale. You don't want a property with bad unchangeables because they are the least popular and the least valuable if they can be sold at all.

What you have to buy is property with bad changeables, but good unchangeables (#4). That would be a "dirty" property which was structurally sound and in a decent location. When you clean it up, you have got a good-good property to sell. After buying a bad changeables-good unchangeables property, then you do what is necessary to change the bad changeables to good. Here is a list of things which are generally unchangeable: locations, basic architecture, drainage, room sizes, frame work, and so on. Other features like financing, zoning, tenancy etc. also exists apart from the physical features like changeables and unchangeables of the property.