Investing in real estate is a rewarding journey, but raising funds for real estate requires a strategic approach. As savvy investors continue creating innovative strategies, one hidden gem remains unexplored – your current property. Your current property is essential to raising funds, which you can achieve through strategic home improvements. The concept is simple: upgrading your property attracts potential buyers and renters and opens the door to securing loans. Discover how to raise funds for real estate investments through these eight tips for property upgrading.
1. Finish the Basement
Do you have an unfinished basement on your current property? Finishing it will convert it into a valuable asset by increasing your property’s livable space. If you plan on selling the property, finishing the basement will help potential investors view the property as well-maintained. Zillow says you can expect a 70% ROI when you finish your basement. While this is not a dollar-for-dollar return, the basement will act as an enticement to interested potential buyers.
If you are wondering how to raise funds for real estate investments using your basement, consider renting it out. Finishing your basement into a livable space is an excellent way to generate rental income to fund your real estate projects. For example, you’ll need to make the space comfortable and healthy for living through air condition repair. Rental properties are in high demand, especially near workplaces, so converting your basement can provide a steady flow of rental income.
If you don’t sell or rent out your basement, you can consider leveraging your home equity to finance your real estate project. Here’s how it works: finishing your basement increases your home equity. Loan firms consider your home equity when deciding how much to loan you, so the higher your equity, the more funds you can get. Home equity as a funding source offers lower interest rates than other financing options, making it an attractive and cost-effective source of capital.
Finishing your basement requires adequate planning and assessment to identify structural and potential challenges. Since basements are prone to water damage, you should waterproof them to make the space livable. If you plan to rent it out, consider the increased utility needs and make relevant changes, such as water heater installation on your property.
2. Make It Suitable for Large Families
Another tip you can consider when learning how to raise funds for real estate investments is upgrading it to be suitable for large families. Making the house friendly to people with large families can help you raise funds in multiple ways for your other real estate projects. For starters, you can maximize its rental potential by making it attractive to a larger pool of tenants. Larger houses typically collect higher rents, so you can redirect it to funding your real estate.
Property enhancements to cater to large families can also increase the overall value of your property. Features like additional bedrooms, child-friendly amenities (with a home safety aid), and family rooms can boost the property’s market value and appeal to large families. Thus, converting your current property to accommodate large families can be a strategic way to raise funds for your other real estate projects.
Another way you can raise funds by making your property attractive to large families is by creating an opportunity for shared ownership. Some property investors looking for large-scale projects might be interested in pooling funds to purchase a property fit for multiple families. For context, a family looking into buying a home will consider the square footage of livable space. According to Financial Samurai, one person needs 600-700 square feet of livable space, so for a family of ten, 6000-7000 square feet would be ideal.
3. Personalize the Layout
Do you know you can raise funds for real estate projects by personalizing the layout of your current home? You only need the best custom home builders to add customized features and thoughtful designs that attract potential buyers to your property. Custom designs act as a unique selling point, making selling or flipping a property easier. You will get a higher resale value than you would without the customization. Some buyers appreciate individuality and aesthetics, and thus they will be eager to negotiate a house on sale.
If you want to know how to raise funds for real estate investments by personalizing the layout, target niche markets. It’s essential to learn that the real estate market comprises diverse individuals with varying tastes. For example, younger generations are more interested in minimalism and eco-friendly features, so a minimalist biophilic design could attract that market better. Through customization, you can attract niche markets that the general real estate is not reaching.
To personalize the layout, first consider the personality of the buyer you are targeting. When customizing a property, you can’t mix classic, modern, and minimalist styles; you must pick one style. Make sure not to go overboard, but make the space attractive and functional. For example, you can hire home addition companies to customize the property for buyers who love having ample space.
4. Find a Low-Interest Mortgage
Are you wondering how to raise funds for real estate investments when you are already paying for another house? Consider getting a low-interest mortgage from a reliable home mortgage broker. That way, you’ll have extra savings to fund a second home project. A low-interest mortgage means lower borrowing costs, which will benefit you because you can direct extra resources to other projects. It also means you will have a higher cash flow.
A low-interest mortgage can also allow you to leverage your buying power in the real estate market. While the real estate market fluctuates, in most cases, a property is more valuable tomorrow than it is today with the right maintenance. Thus, rather than accumulate more interest on your mortgage, your current cashflow makes it easier to buy valuable real estate today that will have more value tomorrow.
If you are looking for funds to invest in a personal real estate project, having a low-interest mortgage will be a game changer. It means you can start enjoying living on the property without waiting for too long. You’ll have long-term savings that you can channel to other projects.
5. Honor Your Passed Family Members’ Wishes
Do you know you can learn how to raise funds for real estate investments by focusing on the sentimental aspects of a property? Whether you bought a property recently so you can flip it or have an inherited property, you can leverage its sentimental value to acquire higher rental prices or a resale value. It’s a good way to honor your late family members’ wishes, such as being placed in eco-conscious funeral homes or being a responsible adult.
Consider this: would your deceased loved ones want you to sell the home? If not, consider other ways to make money that fund your other real estate projects without dishonoring their memory. For example, if your deceased aunt loved hosting parties, you could convert the property to host weddings and use your profit to fund your investments. If they were okay with you selling the property, consider the type of home buyer they would have preferred.
One of the advantages of inheriting a property is that it comes with vintage value, especially if it’s gone through multiple generations. Instead of selling it to fund your real estate investments, you could consider creative ways to make money. For example, you can turn it into a haunted house and host spooky Halloween parties.
6. Make It Energy Efficient
Are you wondering how to raise funds for real estate investments with your current property? Consider making your property energy efficient, and you might see great results. From reducing waste in heating oil delivery to minimizing usage by the HVAC, energy efficiency is a top factor for the modern house buyer. Not only are buyers wary of sinking their savings in utility bills, many are increasingly eco-conscious and thus don’t want to waste energy intentionally.
If you rent out the property to temporary tenants, making your property energy efficient will keep your operating costs low, thus allowing you a profit to fund real estate projects. It will also increase comfort for the residents and thus potentially increase their dwell time on the property. Energy efficiency can be a good selling point if you plan to sell a house. According to the International Energy Agency, increasing energy efficiency has an ROI of 17% in developed countries.
Energy efficiency goes beyond buying low-usage bulbs and electrical appliances. It also involves design. For example, simple insulation can make your house energy efficient because your HVAC won’t be overworking. Investing in energy-efficient windows will ensure your house is not gaining or losing too much heat.
7. Clean Up After Your Pets
If you consider hiring out the space or doing short-term rentals like Airbnb, you must keep the space clean and attractive. Home buyers and tenants are picky, and the market is competitive, so if you are slacking in any area, they will look elsewhere without flinching. An often-forgotten tip is cleaning up after your pets. That means removing litter, fluff, and pet shedding because they give the impression that you are not maintaining the property well.
While cleaning up after your pets may not seem essential when learning how to raise funds for real estate, it can make renting or selling a property easier. While some people love pets and don’t mind cat dander, others get allergic reactions to pet waste. The Asthma and Allergy Foundation of America estimates that 10-20% of the population is allergic to pet fur. The last thing you want during a sales day is prospective buyers sneezing because you don’t clean up after your pet.
Since you are so busy raising funds for real estate, you may not be able to handle every aspect of preparing your property for sale or renting. Your best is to engage different service providers to help you clean up. Call a dog grooming service to help you keep your furry friends pristine and ready to usher prospective buyers in. Cleaning services leave every space spotless of dander and other waste.
8. Marketing Your Property
Sometimes, the factor standing between you and a great sale or rental offer is staging and marketing your property. So, if you want to learn how to raise funds for real estate investments, get some savvy marketing skills and start with photography. Many people use online databases to find their dream house or rental. Well-shot videos and visuals can communicate value. It can increase the number of people coming for consultations.
When marketing, first impressions also matter a lot. Invest in making the exterior pop and drawing buyers’ attention. For example, hire a lawn care company to do landscaping and lawn care a few weeks before giving the grass time to grow. Also, declutter the yard and every object that detracts from the house’s value. Don’t fine tune the details too much, even when personalizing, because it could turn off potential buyers. Marketing your property well will give you a good return to invest in other real estate projects.
Marketing goes beyond the visuals online to the property itself. For example, prospective buyers will be turned away on arrival if you have great photos on an online listing but use filters or angles that hide defects in the house. So, it would help if you mastered the art of staging. Choose a few features in the house with significant value, then make them the focal point. Hire a cleaning service provider to leave the property pristine and ready for sale.
To bring it all together, your property is one of the best ways to raise funds for real estate investments. You already own it, but it can bring an even higher income if you upgrade it. From personalizing the layout to increasing energy efficiency, this guide shows you how to raise funds for real estate investments in the comfort of your home. Remember to research the market and talk to a consultant before any project.