By partnering with a non-recourse lender, you can use your IRA to start investing in real estate. This is a great way to make passive income if you plan on renting out your new properties or selling them later. But investing in property isn’t simply a way to print money. Not every investment into a home, apartment complex, or agricultural lot will yield a high return on your investment. Indeed, you’ll need to invest in the “right” properties to ensure that you have interested renters or buyers.
In a past blog post, we outlined 11 features to look for investment properties. While those features do a great job outlining which properties may make a smart investment, you also have to consider the curb appeal of the property itself. On paper, the property might make perfect sense for investment, but if your potential buyer or renter doesn’t find the home appealing and doesn’t share your sense of what works on paper, your investment may flop.
Since 2008, First Western Federal Savings Bank has helped hundreds invest into real estate. That means we have a strong sense of which homes have curb appeal that draws buyers and which do not. Let’s explore this often subjective topic and apply some objective factors to it.
What Is Curb Appeal and Why Does It Matter
if you watched any real estate or home remodeling show, you very likely heard the term “curb appeal” thrown around. Even if you don’t have a hard-and-fast definition for it, you probably already have a sense of what it is. Consider this: you are driving through a neighborhood that seems well put together and see that all homes share a common aesthetic. Suddenly, you notice one home in particular that stands out. This home that caught your attention very likely has high curb appeal. On the other hand, you’re driving through the neighborhood just one block over and one home seems to draw your gaze like a train wreck; this home probably lacks any sense of curb appeal.
At its most basic, curb appeal is made up of the features and design elements of your home and its landscaping that make its first impression on you. No singular feature or element of a home makes it stand out. It’s the balance of all these features together that makes a home appealing to passersby and potential buyers or renters.
For those new to the realm of real estate investing, curb appeal may not be a factor that they consider. However, it’s a factor that you simply cannot afford to ignore. The fact is, people want to rent or buy homes that are nice to look at and offer comfortable living. If the properties that you’re investing in lack these feelings and features, and you will struggle to rent or sell them.
What Lends a Property Curb Appeal
An easy way to think about curb appeal is by thinking of your favorite piece of music. It’s that gentle balance of different instruments, rhythms, and cords that make it interesting or meaningful to you. And like no two songs are ever quite the same, no two homes will ever share the same sense of curb appeal. Even in neighborhoods with “cookie-cutter homes” with identical houses on identical lots, there will be some homes that stand out. But what of the things that make these houses remarkable? It’s often a combination of these elements:
Yes, it can be difficult to inspect the roof from the curb; however, it’s something that potential homebuyers or renters do keep in mind when they’re shopping for a home. If shingles are peeling away, or tiles have come loose and fallen off, this is an immediate red flag to potential buyers or renters. While these are seemingly small problems, it could be symptomatic of a much larger issue, raising concerns about the integrity of the roof. In the same vein, large branches should be cleared away from the roofline to minimize the potential for damage.
It’s a well-known fact in the real estate world that attractive landscaping always earns a higher price tag for a home. It’s not uncommon for homes with nice landscaping to see their sale price increase anywhere from 5–12%. But attractive landscaping doesn’t necessarily mean it has to be elaborate landscaping. Simple changes like edging the lawn and flower beds, having lush well-kept bushes, and tall shade trees. Naturally, a carefully manicured lawn clear of leaves and other debris can also help your landscape look brighter and more put together.
A Well-Kept Exterior
Even if the roof is in good shape and the landscaping was done by an expert, a home with a dirty or damaged exterior is an immediate way to lose potential buyers and renters. If the home or building has chipped and peeling paint or is covered in debris like moss, bird droppings, and dirt, these distractions will draw your potential buyer’s eye. Similarly, the cleanliness of your windows also adds to the perception of the exterior of the home. Make sure that the windows are free from water spots and haze.
Lighting on the Home
For those who are seriously interested in renting or purchasing the property from you, they may drive past the home at different times of the day to see what it looks like in different lighting conditions. The most perceptive of them will be examining your exterior light fixtures. If these exterior lights do not work, it’s very likely that the potential buyer or renter will not be able to see or find your home at night. Additionally, damaged fixtures can impact their perception of the property even when they see them during the day.
Get the IRA Non-Recourse Loan You Need Today
Establishing the curb appeal of the home can be challenging, but getting the funding you need to purchase at home doesn’t have to be. At First Western Federal Savings Bank, we’re ready to help you apply for and receive the loan you need to start investing in real estate. As a top non-recourse loan lender with more than 40 years of experience, you can trust our knowledge and experience to ensure that you get the loan that’s right for you. Contact us today to find out more about our IRA non-recourse loans and then apply now.