Real Estate Square Footage


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When you are looking at investing in a real estate property, you and the property owner may have a disagreement in the amount of square footage in a home. Often, a homeowner may originally list a property with approximate square footage. The numbers that come back after an appraisal or inspection may be quite different. These numbers may or may not be in your favor.

Definition

The square footage of a home is defined as the actual livable space of a property. Unfinished areas of the home, including attics, basements, garages, garden sheds, etc. are usually not included in this number. Plus, any additions to the home that did not have the proper building contracts filed may not be eligible as part of the square footage calculation. For the actual “square footage” of a property, there must be an official appraisal performed.

The Good News

When you are looking at real estate investment properties, the difference between the potential square footage and the listed square footage can be used in your favor. At the very least, the potential square footage should be considered in your estimation of the potential value of the property.

Investment Potential

Garages – Depending upon the size of the garage, the area can be turned into a separate apartment to rent. Access to heat and a/c, as well as kitchen and bathroom facilities can be deciding factors to determine if the space is convertible into apartment space.

Attics – Some houses have huge attics that just need a little finishing with insulation, flooring, and drywall in order to turn unused footage into official “square footage”. Depending upon the size and the utilities available, attics can be turned into usable apartment space.

Basements – Some basements are little harder to turn into usable square footage than others. Once water issues leaking/seeping issues are fixed, basements are easy to finish and turn into usable square footage that doubles the homes size or into rentable basement apartments.

Garden Sheds – Depending on how the shed was initially built, garden sheds may be a little harder to turn into livable space, but many garden sheds have turned into mother-in-law homes or guest houses. If the shed has a decent foundation, access to utilities like water, electricity, and a/c or heat, it can very well be a livable, usable space, and possibly a rental property.

As a real estate investor, you are looking for a good deal on a property. Ethically, if the appraisal comes back far lower than the potential square footage of the property, make a good bid based on the potential of the home, but not so good that you won’t be able to finish areas to access the potential of the property.

For information on real estate investment concerns or real estate franchises, visit us at Homevestors.com.

 

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