From the course: Real Estate Analysis Foundations
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Stabilization - Microsoft Excel Tutorial
From the course: Real Estate Analysis Foundations
Stabilization
- Once you finish construction or any rehab, the next phase is called stabilization. This is the part where you prepare your asset to get to the point where it's ready for sale. All right, so the goal here is to getting it ready, to listing it and ultimately making the sale. Now, there's two different kinds of stabilization. If you're doing something related to an income-producing asset that's collecting rent, the stabilization will come from getting the occupancy levels and the rental rates to a stabilization rate. So the occupancy in the market may be 80% stabilized. Well, if you're putting a new apartment in that market, then you want to get that apartment to at least 80% occupied and getting it at the market rent before you can sell it to a buyer who would be interested in that. Now, if you're just doing rental income property, that's basically getting the house completely ready, any kind of renovations that you have done and made completely done, getting a new tenant in there at…
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