Look Past the Bottom Line for a Property's Potential

After asking and answering them, investors might try taking off the blinders and thinking outside of the box. Our population is growing, and land -- unlike cars, furniture, or other structures -- cannot be remade. Real estate investors might ask themselves these simple questions:

1. Is there growth in the area where the property is located? Is there anywhere for the growth to go? If so, is it headed towards your property's location?

2. Has the city or county zoned the are for revitalization or economic development? If so, are there any special funds or benefits available?

3. Is the property accessible to public transportation?

4. Are people beginning to look for homes in this area? If so, investors want to be looking far in advance of others to secure the best property deals.

5. Is the property value in the neighborhood in a slump or an upswing? Purchase during a slump for maximum profits. The truth is, an investor not make a profit from the property for the first two years. Investment property owners should be looking at the long-term, because they may make money over the next 15 years, while others are not.

Check County Records for Property Value. Do your research, or hire a REALTOR who is motivated to do it correctly. Speak to neighbors to understand the benefits of living there. Look at the neighborhood surrounding the area, and try to determine if those homes have increased in value. For a solid indicator, consider county property tax figures.

In some areas you will find a slight increase in the tax base of 1-3%. In other areas, like Williamsburg, Virginia, taxes have increased 15-13%. Tax base increases are linked to improved property value.

Are Revitalization Funds Available? If your investment property venture is a legitimate business, contact the local Chamber of Commerce and county government to see if there are special funds available for revitalization projects. Most Chamber of Commerces provide such programs as well as classes where investors learn how to access these funds.

There are lots of great examples of properties with potential. I'd like to share some background about one of my own listings, a motel in Williamsburg that has not been open for three years. The owners do not know when it was built - probably in the 50s or 60s. The motel sits on 2 1/3 acres of land, which is all zoned commercially. The motel is situated right on a main thoroughfare that was once called "The Golden Mile" of Williamsburg. It's geographic location has real potential.