The true value of a property: its potential
So… in my 14 years of real estate I have sold close to 100 homes… When I think back on some of the deals, I can’t help but smile and gloat (just a little) about my instincts relating to overall value and appreciation.
Here’s the deal, as a realtor, we have access to the most current sales and market information. So when I’m explaining the market data in a particular neighborhood and the direction the market is going, I’m absolutely referencing the facts. HOWEVER, there’s more to knowing overall value than crunching numbers. You have to know what quality looks like in all forms in order to determine whether something has the potential of being worth more in the future…
So yeah, I’m a bit OCD about quality-control when it comes to understanding a property’s value. Here’s what I mean. When assessing a property, start at the beginning of the block. The surrounding homes are equally as important as the subject property.
While a house might score bonus points if it’s surrounded by homes renovated to today’s standards, in some cases, a home surrounded by older properties with its architectural integrity in tact could actually yield a higher return than homes on a block full of flipped properties? (Just take a drive up Plymouth Blvd in Hancock Park or around the hills of Studio City)
Homes built in the 20’s, 30’s and late 50’s offer some of the most inspiring aesthetics. There’s almost a storybook, romantic component to some of them. So when it’s time to upgrade those types of properties, the owner is dealing with a framework that could cost thousands of dollars if one were to try and replicate this from scratch…I bet you see the value in that right??? ($$$$) While you’re buying the great home down the street, your neighboring homes attract people who see the value and know what to do to bring more beauty to the block. Don’t get me wrong, I have a true appreciation for newer construction as well.
But let’s go back to this idea of value… Also consider craftsmanship and choice of materials used to build or enhance a home. I can tell when someone is simply following a trend and when someone is thoughtfully designing a home. It’s not necessarily about money spent on materials, but about how expansive the vision was for the Owner. I can walk around a home and feel whether or not the home has what it takes to be a better version of itself in the future. That’s another thing, if I can help it, I only select properties that meet my clients’ criteria AND have the potential for growth in some capacity in the near future (ie: more value..more $$$$). If a property’s been maxed out (the house is as big as the lot, or the front yard can be mistaken for a sidewalk)… then it’s pretty clear to me that short of tearing down and rebuilding, this house has seen its best days already… My point is that there are important factors that go unnoticed when people are focused on the profile of a property alone.
Prime example of a home that meets all of my Quality Control requirements is one of my favorite properties that I sold on East Blvd in Mar Vista.
The previous owners were able to create a home using forward-thinking design while exuding warmth and the essence of family. Over 6 years later, this house still excites both me and my clients who still live there. And that says a lot, because we’re both beauty-snobs…. In fact, the home is still so perfect for them, that even though their children are growing and new needs are popping up, the owners chose to add a gorgeous pool to the house as opposed to selling and moving to a house with a pool… See? Room for growth, expansion and transformation. It’s like the ultimate confirmation for me!