Imagine an old, dilapidated house in the middle of a real estate neighborhood. Do you think anyone would still put value on that wreck? Think again. With the ugliest of junk, you can make out thousands of dollars from it. Rehabbing a home is one of the most profitable ways of living nowadays. But how do you do it?
The principle of profiting from rehabbing a home is simply buying a close-to-wreck house, repairing them, and sells it again afterwards. Why so? Once you buy a close-to-wreck house, you would spend only little of your cash because of the little value put into the property. Once you’ve done repairs, do renovations, and beautified the house once more, you can now raise the value of the house. But if you want to earn bigger from this, there are several points you have to pick to work on this.
First of all, check your budget. Though these wrecked homes should be of small value, some may have a price higher than the other because of several factors like location. Still, the best time for you to buy a home to rehab is when the real estate market is down. As of this time, the real estate market is facing this phase. When the market is down, the prices of real estate properties are low.
Consider the location of the house to rehab as well. With this, you can soar high the value once you’re done with all the renovations. Choose those houses situated near schools, shopping markets, and other city amenities.
Once you’ve pick a home, negotiate the price through the sales agent. The tip here is not to spend more 70% of the original price of the house when it was first bought. For example, if the original price of the house when it was first bought was $250,000, you should make it a point to settle the deal of purchasing it at a maximum of $140,000 and set aside the remaining $35,000 for the renovation. After renovation, you can sell it again for $250,000 or even more.
Now comes the rehabbing part. You’re supposed to beautify the house once more and make it stand out among all the other houses in the neighborhood but don’t over rehab nor under rehab. Like what’s said above, you shouldn’t spend more than 70% of the house’s original price. Still, with the renovation, the most important places to rehab are kitchens, master bedrooms, bathrooms, and landscaping. These are the main areas an occupant of the house most likely stays in while a good landscaping catches the attention of anyone who passes by the neighborhood.
Lastly, sell your house to the market. The most effective way of selling this in less than three months is through a realtor. Most likely, they will sell the house 15% more than what you negotiated with them. This 15% goes to both parties on a 60-40 share. You get the 8% while the realtor’s commission goes by 7%.