Huge part of real estate is building. Whether you are building on a lot, adding new stories to an office, or just simply building that dream home that you always wanted. The best way to enhance any piece of real estate is to build on it and expand. It gives it an overall enhancement and utilization, and appears attractive to more and more potential buyers. As far as home purchases go, with families growing and income rising, homeowners are always looking to expand on their current property to fortify their lives. Commercial developers are looking to increase the size of the lot to bring new renters for their commercial space.
So when is the best time to build. The short answer I will give here is; always. Never put off building until tomorrow what you can start today. Many people argue that high interest rates or cost of materials make building difficult, and they should wait for some future date. But that could not be further from the truth. I will say it again the time to build is always now. Why is that? Well the value of the home increases the minute you drive in your first nail. And home appreciation becomes cumulative almost like compounding interest. So if you hold off building to some future date, you will be wasting assets and equity they can be gathered right from the start. Yes with building costs being high, the benefit of the expanded property may not be as much, but it is better than doing it in the future. If you look at property prices from the past, you’ll see that they always rise faster than the rate of inflation.
That means that even building that new deck would never be a waste of time. As far as commercial properties go, you can pre-lease or pre-sell commercial space right after the initial blueprints are printed. That means you can take a deposit, and have the lease signed before the windows are even put on the walls. This also gives bankers an incentive to lend more money as they know that the payments will be secured by lease payments.
With commercial properties as well, they also benefit from price appreciation. So they get it from two different sides; rental income and equity positions. So if you’re looking at lumber prices or the cost of contractors and think that we would be better to hold off on building or expanding on your dream home or business; do not wait. The time is always now. All forms of expansion are basically money in the bank.