Residential redevelopers have a resounding impact on local economies; one that extends far beyond the presumptions of many. For what it’s worth, residential redevelopers that know what they are doing can significantly improve the health of the economy they reside in. I maintain that residential redevelopment, provided it was done by someone that knows what they were doing and actually cares for the neighborhood they are working in, is one of the best things that can happen to a community. The benefits that coincide with residential redevelopment are many, and if you play your cards right, there is no reason you can’t contribute to the neighborhoods you love and cherish.
Let’s take a look at some of the most important benefits residential redevelopers have on the community
It’s not the least bit hyperbolic to suggest that investors, even the average commercial redeveloper, have a significant impact on the values of homes within a specific neighborhood. I maintain that purchasing a property with the intent to restore it to its original glory — if not better — initiates a process that unequivocally improves a community. If for nothing else, improving the value of a single property will boost those home values within close proximity to the subject property for one simple reason: comparables.
Comparables, or comps as they have been dubbed by those in the industry, are those properties with characteristics that are similar to a subject property whose value is being sought. They are essentially the best way to provide an accurate valuation on nearby properties. If you can increase the value of one property, those that are being compared to it will receive the same treatment. Outside of the comps themselves, renovating dilapidated properties improves curb appeal and improves the overall aesthetics of a neighborhood, which again improves property values.
Home appreciation is the result of a number of circumstances coming together, but you can argue that residential redevelopers have the largest impact. By improving neighborhoods, demand should increase. What’s more, that same demand will drive prices up even more.
Residential redevelopers are capable of stimulating the economy in more ways than what those looking from he outside in may be aware of. On the surface, one would suspect the majority of economic stimulation to take place in the form of a real estate transaction. It’s worth noting, however, that even small transactions resonate on multiple levels. Just one real estate transaction can account for several moving parts, each of which represents a job that needs to be done. Over the course of residential redevelopment, one may require the assistance of a number of professionals.
Let’s take a look at a few of the experts residential redevelopers may work with over the course of a transaction.
A collaborative effort is required for an investor to successfully renovate a home and sell it to a potential buyer. The chain of events that transpires during this process introduces a variety of employment opportunities.Therefore, the benefits of residential redevelopers can provide jobs for countless individuals and monetary gains for local businesses supplying the project.
Local Tax Benefits
The benefits of residential redevelopers provide local cities with the opportunity to collect more taxes. By acquiring, restoring and selling multiple properties, investors increase the amount of homes owned within a particular jurisdiction. As home ownership increases, the city in which the property resides gains access to increased monetary gains in the form of property tax.
Property tax is a levy on a particular piece of land that each owner is required to pay. Under this system, local governments evaluate the monetary value of a particular property. Once the value has been determined, tax is applied to the owner in proportion to the value set forth by the city.
Property tax received from homeowners provides the city with an invaluable source of income. It is the main tax supporting local education, police/fire protection, local governments, some free medical services, and local infrastructure.
Lower Crime Rates
In some cases, residential redevelopment is responsible for the gentrification of an area. For those of you unfamiliar with the process, gentrification “is a process of renovation and revival of deteriorated urban neighborhoods by means of influx of more affluent residents, which results in increased property values and the displacing of lower-income families and small businesses,” according to Wikipedia.
While controversial in some regards, this process has proven to lower crime rates and reduce incidents of malicious activity. Not surprisingly, crime rates have a negative impact on neighborhoods where illegal activity runs rampant. Home prices, along with demand, will take a hit in the presence of wide-spread illegal activity.
As it turns out, residential redevelopment may just be the solution many in these neighborhoods have been looking for. Investors have developed a reputation for acquiring dilapidated homes that often fit the description of a distressed property. Successfully rehabilitating such a property may remove any delinquents or transients that reside within. Removing a distressed property from a geographical region may serve to lower crime rates in a given area while simultaneously increasing home appreciation.
Residential redevelopers resinate on a high level for the community they serve. The individual working on the property not only makes a profit on their hard work, but they have the satisfaction of improving the neighborhood they have chosen to work in. The community, on the other hand, will see the investor’s hard work translate into a number of invaluable benefits.