Stabilization

Stabilization

The goal here is to get it ready, list it, and ultimately make the sale.

There are two different kinds of stabilization:

  • Occupancy to stabilization

For example, the occupancy in the market may have 80 percent stabilized. If you’re putting a new apartment in that market, then you want to get that apartment to at least 80 percent occupied and get it at the market rent before you can sell it to a buyer who would be interested in that.

 

  • Rental rates to stabilization

if you’re just doing rental income or property, that’s getting the house completely ready for any kind of renovations that you have done and made completely done, getting a new tenant in there at the higher market rents. And then now you can sell this rental property at a higher price because it’s able to achieve higher rents. So for income-producing properties, stabilizing means getting tenants in there, getting the right market rents, and getting the occupancy to a level that is at least what the market is experiencing.