Increasing Equity – The lost ingredient is back by Dick Dohack
Having owned restaurants for more than 35 years, controlling costs is a major part of who I am. The restaurant business is a high overhead, low margin business and every penny counts. I only know one way to operate and that is to treat everyone’s property as if it were my own. That being said, sometimes properties just require maintenance and upkeep and that costs money.
For years we were not only dealing with the costs of maintaining properties but it was all going on with a backdrop of diminishing values. While the realities of maintaining properties has not changed, the backdrop most certainly has. It is true that the catastrophic past diminished values but the upside to that has been reduced real estate taxes. Foreclosure and short sales were devastating for many but it created a disproportionate number of renters which has led to increased rents. Last but not least, when something hits bottom there is nowhere to go but up and that is precisely what is going on with regard to property values. There is no blanket that applies to every property but in general we have seen property values increase in the 10 to 15% area in each of the past two years.
So let’s review:
1. Lower property taxes
2. Increasing rents
3. Larger pool of renters
4. Increasing property values
The moral of the story is “keep your eyes on the prize”. Real estate is a long term investment. There are ups and downs but what is important is the direction and the destination. It is said with any investment that paper losses or gains mean nothing until it is time to sell. What we are concerned with most of the time is cash flow but it is also important to recognize that there are intrinsic things going on that have to be considered as well. Never forget to factor in the tax advantages, the increasing equity, and the long term plan.
In the mean time I will remain dedicated to delivering the best service at the lowest possible cost. We want to know your goals so that we can appropriately assist you in accomplishing them. If you are considering whether or not selling in this market is wise please give us a call. We can provide you with the information you need to make an informed decision. If you decide that it is indeed time to sell, we are experts at professionally listing and selling and stand ready to assist.