What to Look out for When Purchasing Rehab Properties
For many homeowners and prospective homeowners, the idea of purchasing and owning a home that requires significant repairs and updating is enough to make one scared. Not everyone is the handy type who enjoys getting their hands dirty and spending days, weeks or even months tearing down walls, ripping out cabinets and flooring, or performing an assortment of other renovation projects. However, if you are looking to turn in a nice profit on your purchase, finding rehab properties can be an exciting process. Getting your hands on the right investment is critical, however, because a few missteps can leave you in a financial hole. Here are some ways to ensure you purchase the best property possible.
Get Your Finances in Order
This point seems obvious, right? Before you run out and start getting serious about purchasing a fixer-upper, set a budget. Decide how much you can and are willing to spend on the purchase price and, perhaps more importantly, establish a firm budget on how much you’ll spend on renovations. Then, don’t deviate from the budget. Lastly, ensure that you have the necessary funding to make the purchase. Once these things are in place, you’re ready to make your purchase and start your project.
More than likely, you’ve made a few connections over the years as you’ve worked in the real estate world. You probably know your share of agents, house flippers and investors. Talk to your trusted colleagues about what type of rehab properties they’ve dealt with. Ask those in your professional network what good deals they’re aware of or even what ones they’ve had their eyes on but had to pass up. You can even let family members and friends know what you’re on the lookout for and ask them to point you in the right direction if they see anything appealing.
Look for Slow-Movers
Some people might shy away from rehab properties that have been on the market for several weeks or month. After all, you may wonder what’s wrong with the place if it simply hasn’t gotten any takers despite being on the market for what seems like forever. However, owners of these types of homes are likely desperate to get rid of the property, meaning you have a good opportunity to swoop in and score an excellent deal. Stagnant listings may come with some problems to deal with, but a quick buy at a lower price gives you some flexibility.
Purchasing your next rehab property doesn’t have to be difficult. Knowing these few tips can make a huge difference.