It’s excited to imagine what the “after” could look like after you turn an outdated, unkept property into something out of a magazine.
A fresh coat of paint.
With good bones and a hefty rehab budget, you can transform some nasty properties into like-new homes.
Except, it’s easy for you to over-rehab the property to your standards and it can KILL your potential profit!
Why is that?
If you’re rehabbing a property in a neighborhood with comps topping out at $250k on renovated properties and you over-rehab your property so you have to market it for $285k to make any profit, it most likely won’t sell at the asking price.
You never want to be the nicest house in the neighborhood.
Instead, you should look at comps in the area that have been updated and see the level of standards they have.
- What type of countertops did they use?
- What type of appliances are installed?
- In the bathrooms, what’s the level of updating?
- Outside the house, was any landscaping done?
- Is the lighting updated?
After seeing what comps are going for in the area after they’ve been rehabbed AND seeing the level of repairs that were made, you’ll be able to better analyze the repairs you should make for the property.
Make the property fit into the neighborhood!
Once you determine what needs to be rehabbed, make sure your numbers make sense and you can afford to rehab the property. Make sure not to miss any high-dollar repairs such as foundation, roof, plumbing, HVAC work.
If you’re the one picking out the selections to put in the property, take out all emotions and think like a business.
Stay neutral in your color selections!
Even if you really love a certain upgrade, others might not and the house needs to appeal to as wide of net as possible.
Once you do a few rehabs at a certain price point, it will be easier for you to come up with a master list of neutral selections that can be done in each house.
It doesn’t matter if all the houses have the same tile because you’ll be serving a different target audience each time.
Take all emotion out of rehabbing and make it systematized.
Otherwise, your emotions will only cost you money.