Real estate investing comes in many forms. But recent attention has put home renovation projects in the spotlight, thanks to TV networks. Home repair and DIY shows have popularized the house-flipping business, enticing ambitious buyers into real estate markets.
While fixer-uppers can be an excellent investment choice for some, nothing is as easy as it appears on TV, including home renovations. Here are some of the best practices of professional fixer-uppers for you to learn from:
1. Multipurpose Flip: House flipping doesn’t have to mean an immediate turnaround. Many investors buy fixer-uppers with an eye on the long term, using their renovated house as a rental or vacation home. The added value of your repairs is compounded by market appreciation, and earning money from renters helps too.
2. Location, Location, Location: A home’s value can either be bolstered or limited by its location. Take the time to do your research: Learn about traffic patterns in the area, recent housing market information and the overall appearance of the neighborhood.
3. Know Your Limits: Renovation projects come with many challenges. Sometimes you can handle those challenges with your expertise. Other times, it’s best to hire a professional. Make sure you know the difference.
4. Structural vs. Cosmetic: The less you can spend to repair a home, the greater your profits will be. Working with an inspector can help you gauge probable renovation costs with greater accuracy. If you’re in doubt, pay close attention to structural versus cosmetic damage before you buy. Structural repairs can quickly drive up costs.
Have additional questions? Looking for a fixer-upper of your own? Get in touch.