Dien Rice
August 9, 2002, 11:00 PM
Hi Boyd,
I thought I'd add another example.... :)
I have a friend here who's been very successful in property investment.... He's succeeded because he's become an "expert" at seeing the "hidden value" in second-hand houses....
He likes to buy timber (wooden) houses - because often there is more "hidden value" there than with brick homes.
Here's the essence of his technique.... He looks for houses which are well-constructed and "solid" - that don't have any structural problems. But, he also looks for homes which may look pretty awful.... Maybe the paint is peeling, or simply just an awful paint job. Perhaps the carpet is ripped up....
The key is, all these things are "cosmetic" problems. Struturally, the house is sound....
He finds that many people don't want to buy these homes, because they look terrible. That means, he can buy them cheap!
After he buys them - you guessed it - he fixes them up. He repaints it, puts in new carpet, and does other "cosmetic" improvements. Note that NONE of these are "structural" improvements - this is where a lot of people who plan to do "fixer-uppers" go wrong! "Structural" improvemnents can be a nightmare - so he sticks to houses which need "cosmetic" improvements only!
It doesn't take him very long or much money to fix these problems.... Afterwards, he can rent the house out for a higher rental rate than it's ever been rented out before. Because the house suddenly looks great!
He sees the "hidden value" in a house with a good, solid structure, yet which has many "cosmetic" problems which are easily fixable. He's been able to get a couple of "bargain" houses that way.... He's done very well by doing this!
- Dien Rice
I thought I'd add another example.... :)
I have a friend here who's been very successful in property investment.... He's succeeded because he's become an "expert" at seeing the "hidden value" in second-hand houses....
He likes to buy timber (wooden) houses - because often there is more "hidden value" there than with brick homes.
Here's the essence of his technique.... He looks for houses which are well-constructed and "solid" - that don't have any structural problems. But, he also looks for homes which may look pretty awful.... Maybe the paint is peeling, or simply just an awful paint job. Perhaps the carpet is ripped up....
The key is, all these things are "cosmetic" problems. Struturally, the house is sound....
He finds that many people don't want to buy these homes, because they look terrible. That means, he can buy them cheap!
After he buys them - you guessed it - he fixes them up. He repaints it, puts in new carpet, and does other "cosmetic" improvements. Note that NONE of these are "structural" improvements - this is where a lot of people who plan to do "fixer-uppers" go wrong! "Structural" improvemnents can be a nightmare - so he sticks to houses which need "cosmetic" improvements only!
It doesn't take him very long or much money to fix these problems.... Afterwards, he can rent the house out for a higher rental rate than it's ever been rented out before. Because the house suddenly looks great!
He sees the "hidden value" in a house with a good, solid structure, yet which has many "cosmetic" problems which are easily fixable. He's been able to get a couple of "bargain" houses that way.... He's done very well by doing this!
- Dien Rice
