In this episode of Investor Insight, CREW TV explores why investors are hesitant to spend anything on renovations as the lending environment changes. Still, there are several wise investments to make in a property without overimproving it.
CREW's Jemima Codrington interviews GTA Realtor Ruben Furtado and broker Nick Karadza, both with Rock Star Real Estate Inc.
Video transcript below:
Jemima Codrington: You have got to spend money to make money, but try telling that to the bank and a growing number of investors are worried about over improving property. Hi, I’m Jemima Codrington and welcome to Investor Insight.
Forget the fear! Banks are indeed abandoning mortgage rental program and their sitting wars are making it harder than ever to win new purchases let alone renovate them. But until recently this was the norm. And it once again is.
Nick Karadza, Real Estae Broker, Rock Star Real Estate Inc.
Nick Karadza: I think what most investors forget about today’s financing environment is that it was like this only a few years ago. So just because they loosened up the standards everyone got used to this easy money policies. Now we have tightened up for investors again, it’s the same challenges we are facing now as we were before. So the same answers ring true. What we want to do is, look for strategic partners, joint venture partners and then private money and a lot of investors don’t realise the amount of money that’s available for good investment properties and good investments. There is always money available and they will be find them.
Jemima Codrington: Still investors are concerned about their own funding as their lenders are. How to improve without over improving a property.
Ruben Furtado, Realtor
Ruben Furtado: It’s actually pretty common, where you see people over improve a property, sometimes they will bring in some very expensive granite, something that won’t be identified by the actual potential buyer. However, if you would have take those resources then actually invest in things that differentiate your home. That would really lend itself well to maybe the person’s life style. So example would be, perhaps it’s a steam shower, dry sauna or built in barbeque or maybe a media room downstairs within a basement. Those things are things that are going to help differentiate your home and help to set in a new price trend in terms of the sale price.