Sellers... Don't Overlook Your Property's Investment Value
Published May 3, 2007
"...exploit every opportunity to differentiate their property..."
As the market continues to weaken and inventories continue to rise, sellers should review and exploit every opportunity to differentiate their property from the competition. One area that must not be overlooked is an analysis of the investment value of the property to be sold.
Many vacation and second home buyers purchase for investment potential as well as recreational purposes. As such, even if a seller would never consider renting the subject property, preparation of projected investment synopsis is highly encouraged and can be a meaningful sales tool.
The synopsis is based upon resonable assumptions as to rent, occupancy, operating expenses, tax savings, appreciation and projected holding period. The results are almost always accretive and become another component of value for the property. A typical report is refected below.
Maine is unique in that rents for peak summer season can be quite high relative to the value of the property. Supply and demand, unique aesthetic settings and wonderful climate are contributors to this annommaly. Where else can a 800 square foot cabin with out water, sewer, or electric, but on a pristine pond, command $500 per week? These facts bode well for the investment profile of Maine properties.
"...cash flow becomes an additional component of many benenfits..."
Sellers are oftem amazed at the impact on buyers of realitively minor cash contributions from rental income. In our Florida operation it is not uncommon to see multi million dollar condos sold as investments. These "investments" produce $15,000 to $20,000 of income annually, a miserly return for sure. However these revenues are used to offset holding costs such as taxes, and maintenance thereby reducing the owner's actual out of pocket expense. The small cash flow becomes an additional component of many benefits... recreation, tax savings, and long term appreciation.
So seller's, add an investment component to your sales effort. It may be the tool that makes a marketing difference. We would be pleased to prepare such an analysis on your property. Contact us below.
