Buying the worst house in the best suburb

05 November 2021 | Life Style

It is a common investment strategy to purchase a fixer-upper in a desirable suburb. Some may even go so far as to try and find the worst home in the area to ensure the lowest possible purchase price.
When adopting this approach, Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, warns investors to keep a close watch on their spending to ensure a good return on investment.
“The ‘worst’ home in a suburb can come in different forms. The easiest to correct is if the home is simply out-of-date but is otherwise structurally sound and has good bones to work with. But, profit margins will grow ever smaller if the home is on a much smaller plot than the rest of the homes, if it’s floorspace is significantly less, or if the home has a weird layout that will be costly and complicated to correct,” Goslett warns.
When weighing up whether the home will be a good investment, Goslett suggests finding out the cost per square meter to build in the area compared to the cost per square meter homes in the area have sold for in the past. “Local building contractors should be able to provide the former figure, and real estate professionals will be able to provide the latter figure for you based on a competitive market analysis,” says Goslett.
Based on these amounts, investors can do the maths and work out whether adding onto the home to make it closer to the size of other homes in the area will be a profitable exercise.
“Investors should remember that structural changes will cost a lot more than cosmetic changes. Before purchasing the property, conduct a thorough inspection to make sure you won’t be met with unexpected costs, like having to replace the roof or having to rewire the home owing to faulty electrical work,” Goslett says.
Investors will also need to spend strategically when bringing the home up to the standard of other properties in the area. Goslett explains that some features will be in high demand and will increase the value of the home more than others. These features should match the standard of other homes in the area if the investor wants to see good returns. There will be other features that are not as popular where the investor can cut back on costs and find more affordable alternatives.
To maximise the possibility of good returns, Goslett always recommends bringing in a local real estate professional from the start. “Equipped with years of experience in the area and up-to-date with the most current market trends, real estate professionals will have the best idea of what would generate value in their given market and can help investors avoid the mistake of overcapitalizing and cutting into their returns,” he concludes.

Similar News

 

The basics of selling a home

1 month - 01 December 2021 | Life Style

Real estate is possibly the most expensive asset a person will ever own. To ensure maximum returns on one of the largest investments one will...

Don't overspend this Black Friday!

1 month - 24 November 2021 | Life Style

With Black Friday just around the corner, it’s important for consumers to exercise caution and self-discipline when managing their money over this period. Lack of...

The downsides to online house hunting

1 month - 23 November 2021 | Life Style

Although there are thousands of online property listings available to anyone who is looking for real estate, it can be incredibly frustrating to swipe through...

Common mistakes made when selling a home

2 months ago - 10 November 2021 | Life Style

Real estate is one of the most important investments one will ever make. When it comes time to sell the property, it could be financially...

Where to start the house hunting process

2 months ago - 08 November 2021 | Life Style

While it may sound like a reasonably easy thing to do, house hunting may take a little more time and effort than most expect.One of...

Rescue plan for Omeya's residents

2 months ago - 29 October 2021 | Life Style

Windhoek • [email protected] Windhoek's representatives last night tried to convince homeowners at Omeya to lend their support to a rescue plan for the luxury golf...

Living a life of purpose after retiring

2 months ago - 29 October 2021 | Life Style

Wilma Kamati is an executive committee member of the GIPF National Pensioners Association of Namibia (NAPAN). She serves on the Khomas region team, and started...

Smart strategies for sellers

2 months ago - 27 October 2021 | Life Style

Putting a home on the market can be stressful, and it can be difficult to make objective decisions when it matters most.Adrian Goslett, Regional Director...

Three truths every first-time buyer needs to know

3 months ago - 22 October 2021 | Life Style

Many buyers can find the process of purchasing their first home overwhelming because there are so many new concepts with which to grapple. It is...

How agents benefit an experienced buyer or seller

3 months ago - 21 October 2021 | Life Style

There is often a steep learning curve involved in buying or selling your first home. Thereafter, the process becomes far less complicated and intimidating.Buyers and...

Latest News

Chill with Windhoek Express

17 hours ago | Art and Entertainment

Recurring events• 07:00 Bio-Markt / Green Market at the Stephanus Church (Dr Kenneth Kaunda Street) in Windhoek until 12:00 every Saturday.• 16:00 Coffee and Cake...

Festival of classics at COTA

17 hours ago | Art and Entertainment

One of Namibia’s most gifted pianists, Johann van der Merwe, hosts a performance tomorrow (22 January) to raise money to support the Cancer Association of...

Raging river sweeps cars away

18 hours ago | Weather

Windhoek • [email protected] Elisenheim River swept motor vehicles away late on Wednesday night when a flash flood sped past the Farmers Kitchen restaurant at the...

La Niña still on a...

18 hours ago | Weather

Grootfontein • [email protected] the met office issued a warming for today for widespread thunderstorms over the western half of the interior, a meteorologist believes the...

Onreëlmatighede vertraag die aanstelling van...

19 hours ago | Local News

Windhoek • [email protected] hoofstad se burgemeester, Sade Gawanas, sê daar is beweerde onreëlmatighede met betrekking tot die werwing van Stad Windhoek se uitvoerende hoof wat...

Judges dismiss same-sex marriage

1 day - 20 January 2022 | Local News

Jana-Mari SmithThree Windhoek High Court judges have dismissed the application by two Namibians and their foreign born spouses to have their marriages recognised in Namibia,...

Vyf damme kry water

1 day - 20 January 2022 | Environment

Elvira HattinghTeen gistermiddag om 14:50 het die Hardapdam nog sowat 289,3 m³ water per sekonde ingekry, terwyl nog drie ander nasionale damme sedert Maandag ‘n...

Am Weinberg joins Gondwana Collection

1 day - 20 January 2022 | Business

Come 1 February and the Am Weinberg Hotel will join the Gondwana portfolio in a management capacity. According to CEO Gys Joubert of Gondwana Collection...

Cycle lanes progressing well

2 days ago - 19 January 2022 | Infrastructure

The City of Windhoek in collaboration with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ Namibia) continue working towards sustainable mobility in the city.Together, the parties...

Load More