Fixer-uppers: Are they right for you?
Real estate investing comes in many forms. But recent attention has put home renovation projects in the spotlight. Thanks to TV network,s the recent attention to home repair and DIY shows has popularized the house-flipping business, enticing ambitious buyers.
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 4 points from 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 as a long term investment, using their renovated house as a rental or vacation home. The added value of repairs is compounded by market appreciation, and earning money from renters.
2. Location, Location, Location: A home’s value can be determined 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 spend, the greater your profits will be. Working with a home inspector can help you gauge probable renovation costs with greater accuracy. Pay close attention to structural versus cosmetic damage before you buy. Structural repairs can quickly drive up costs.
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