If you’re a real estate investor, then it’s likely you’ve heard the term value-add property.
But what IS a value-add property?
Well, first of all, a value-add property means exactly like what it sounds like: a property that has value added to it.
Well, you add value to it by repairing it.
Think about a fix and flip or a fix and hold (aka, a rental property).
When you come across these pieces of real estate, you’ll quickly discover they’re not in marketable, sellable condition. They need work.
Some need A LOT of work.
So, let’s break things down a bit more.
You buy a property that’s in some kind of disrepair…or simply outdated.
Then you spend some money to fix it up. This can be a lot of money because you have to do things like repair the roof, replace the plumbing, demo the kitchen, and other hefty tasks.
Or you only need to spend a little to tidy things up and make it appealing to future buyers or tenants. That includes replacing old carpet, adding fresh paint, and providing other cosmetic work.
Either way, you’re adding VALUE to the property.
Once you do that, you can turn around and sell it for a profit or rent it for positive monthly cash flow.
And that’s basically it. It’s a fairly simple term to understand.
What you need to understand even more is how to evaluate a property to ensure you’re able to add value AND make a profit.
Because we’re always eager to set you on a path that helps you make the kind of money you need, to live the life you want.