Handy Hints for Real Estate Renovation
The key is to not make the mistakes of so many amateur investors (self included). The aforementioned real estate boom combined with the surge of many popular home improvement shows and the endless resources at local home improvement superstores gave birth to an ever-growing army of weekend warriors. That is until the well started to dry-up.
My wife and I realized, quite suddenly, the importance of monitoring our out-of-pocket expenses better from start to finish – much, much better. The objective was to think more like the investors who had hypnotized us with their plans that would create “unbelievable returns on investments”. Instead of being in awe of their ends, though, we needed to start controlling our means. Primarily, that meant no more complete rehabs or hiring costly contractors which could tie-up a project for months.
There are 5 fixes that, in our experience, can take many properties from rags to a bit closer to riches than if we had dumped a ton of money in them. We learned in what types of property to invest and how to keep the project overhead down. We have a new rule of thumb. First, subtract the estimated cost of repairs from the asking price, and agree to a sale price that we can manage. Then, find a mortgage with a monthly payment that could be covered by a competitive rent if sales were slow. Next, get to work!
1. Paint fixes a lot. Simple, right? It is amazing what you can do with a weekend and some contractor grade paint (assuming the size of your project). Generally it takes us 4 hours to get 2 coats on a 10 x 20 space. Using an edging tool and a thick nap roller can help speed things along. Drop clothes can definitely save some clean-up time (if you are trying to preserve your floors). Taping does take patience and we generally save that for unavoidable mistakes like windows. Buying a satin or an eggshell finish can make the paint job look brighter and more professional. We even use these on the trim when using white. This definitely saves time. Neutral colors seem to go over the best with buyers and tenants.
2. Commercial grade carpets and flooring. See for yourself. Getting a professional carpet installation for us is a must. Although, when comparing prices for different grades of carpet we were very surprised. It was easy to be swayed when looking at a sample. However, after seeing an entire room laid in a lower grade of carpet, the difference was not so obvious. Carpet and hard flooring for us depend on the situation. Selling? We prefer using a plush carpet in a neutral color that shows well and usually tile over any ugly kitchen or bath floors. Renting? We use a darker color loop carpet that can stand up to most renters and install vinyl flooring for problem hard floors.
3. Lighting. Taking down ugly light fixtures and replacing them with newer ones can make a big difference. We have found that even the low cost or close- out lighting at most home improvement stores can make a room look more modern. Do not attempt to change the fixtures if you are not experienced with wiring. The cost of paying a licensed electrician can save time and is worth the piece of mind. Even changing the globes on many fixtures can make a difference.
4. Landscaping. Cleaning-up brush and debris from around a property is important. The first impression is critical when for sale or for rent. We will generally tear out any unattractive or dying shrubs and replace them with small-to-medium sized woody shrubs or flowers and some fresh mulch. This is usually a small investment and can really make a difference.
5. Cleaning. Windows. Doors. Floors. Appliances. Bathrooms. Whatever cleaning products have worked – we use them. This also plays to our first impression on any potential customers. We try to put ourselves in their shoes. What would we think if we walked through this property?
These are some general cosmetic fixes that we have found can add value to properties to help keep the renovation total reasonable. The consideration of many buyers and renters looking at our properties has also included the inspection. When buying we try to make sure that all major concerns are addressed before we close. This helps to avoid any issues when applying for our inspection. Properties are generally more appealing to both types of customers when they pass.
We recommend doing your homework before taking on any new real estate investment in today’s marketplace. However, once you have found the right property at the right price you could employ some or all of these tips right away. They don’t guarantee success, but could help make your net return greater. After all, that is why we invest.
