You think you're adding value to your home- but your really not
I just read an article on yahoo finance called "6 things you think add value to your home--but really don't" (posted on the bulletins).
#2 on the list is "overbuilding for the neighborhood." Now, this article is directed towards homeowners who eventually want to sell. But this absolutely goes for real estate investors/rehabbers as well. You can increase the the value of your investment up to a certain point, but you have to keep in mind what a potential buyer (or renter) is willing to pay in a given neighborhood, and what the comps are around your investment property.
A co-worker of mine knew an investor who did just that: he overbuilt for the neighborhood. The renovations and appliances he put into his property were not justified by the neighborhood it was in.
He broke a very important rule: Do not rehab a property to be what YOU would live in! Rehab the property for who you will be marketing it to.
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Steve - with my students a majority of their co-signing parents are out of state. I assume if they're affluent enough to send kids to college they own real estate, or at least don't want their credit screwed with a civil action, though going after someone out of state would be a major PITA for me.
Couple years ago I had $4000 worth of damages but after explaining to each out of state co-signer that they were ultimately responsible, that the lease specified that they must reimburse for legal costs, and then dragging one of their kids into court twice - the parents came around and the checks rolled in for the damages.
Getting co-signers for my blue-collar and low-income renters is a great idea, but not too realistic. I have actually had parents of a prospective tenant burst out laughing at the request. That in and of itself DISQUALIFIED that tenant!