“It is better to have permanent income than to be fascinating.” Oscar Wilde

I often see properties with large unused areas which could be potentially income producing additions to your property. Many times, after owning a building for a long time it can be difficult to see it objectively, as a potential buyer would.

ADU’s The laws have been changed in the last few years to allow Accessory Dwelling units (ADU’s) where they would not have been possible before. In many cases, the requirements for parking and even for conversion of garages to dwelling units has been relaxed due to the urgent need for additional housing. As always, laws and regulations are subject to change, so there could be changes making it more difficult to build the ADU you have in mind. My suggestion is to talk to 2 or 3 licensed general contractors with recent experience in building ADU’s in the area of your building. You may be surprised at what you can actually do with your property, and you may find some ideas that you had not previously considered. You may also be able to build more than one ADU, depending on your property.

OTHER CHANGES TO YOUR PROPERTY. Are you considering using unused areas as assigned (rented) parking spaces? Do you have room to install a laundry room if there is not one already? You may have a storage room that could be a laundry room, a RENTABLE storage area or an ADU?

If you have a vacant unit, could it be reconfigured to add a wall and create an additional bedroom? Would an inexpensive partial remodel of counter tops, flooring and new appliances give it a new look and new value? Remember the value of your building when you sell or refinance will be affected to a large degree by your GROSS SCHEDULED INCOME. Whatever creates income, usually will create value. You normally only get to create additional value in a unit when it is vacant and there is no way to know when it will be vacant again.

SHORT ON CASH Even though you may have great ideas on adding income to your building, you may not have the finances. Some items, like adding parking spaces can be very inexpensive. There are laundry companies that will outfit your laundry room and collect the money, For a fee, they will do all the work and you still get a good percentage of the income. Check around if you are thinking of going this way, because some companies are much more reputable than others. Lastly, just maintaining your property makes it more desirable to potential tenants. It doesn’t cost anything to keep your property clean with an attractive curb appeal.

“Humor is reason gone mad.” Groucho Marx

What we at PRS PROPERTIES CAN DO. We can give you a good idea of the current value of your building. We can suggest changes you might want to make before sale to give you an idea what type of building you would be able to exchange into. You may decide to stay in the rental business or you may want to move into a more passive real estate investment, such as a triple net or a DSL. We are always available to chat. We can give you referrals for professionals, such as lenders, contractors, and engineers, so that you can decide who you feel best with. We can supply you with rent and sale comparable in the area of your properties, so that you know what rental values are in your area. It is important that you know the true value of your rental units, so that you can get them rented right away at market value, or at least as much as possible with rent control restrictions. We can look at potential purchases that you may be interested in to make the property more desirable, and maybe look at potential issues that an insurer might require you to repair.

If you should decide to sell your building, we can help you exchange into a larger or smaller properties. We can even help you move into something with less management responsibilities. We can also help with getting the paperwork together for a refinance if that is your desire. We can also recommend experienced licensed contractors who can perform any repairs or installations you may need prior to selling. We can also look at your building for other easy and inexpensive changes that might allow you to get a higher value. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.

We are currently looking for “as-is” properties and are willing to purchase with low rents, deferred maintenance or even with a problem tenant in place. We can offer a 7 day escrow and all cash at closing. Give us a call. We have also put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are currently in 1031 exchanges and need to identify a replacement property before their 45 day identification period runs out.

Should you decide to put your property on the market, we will put together an aggressive, targeted and professional campaign to get your property sold fast. We have been doing this for over 40 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.