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Rehabbing a fixer upper is a great way to make extra money or a sustainable income. The problem however is that you can't just go out and purchase the very first fixer upper you see. Instead, you have to be smart about your fixer upper purchases and only buy those properties that you can realistically fix and profit from right away. In this article, we'll provide you with 5 proven tips you can use to make cash from a fixer upper.
1. Understand that your mission is not to make your property the best house on the block. Instead, it is to upgrade the property so that it is at least equal to the other houses on the block. That is, your renovated fixer upper should be able to "hold its own" once you're finished fixing it up. For instance, if every house on the block has professional landscaping and the house you're considering has dead grass and weeds galore, your first priority will be to improve the landscaping so that it looks comparable to your neighbors.
2. When choosing a fixer upper, make sure you're competent to do the necessary fixer upper repairs and that they're within your budget. That is, if you are not an expert electrician and don't have the funds to hire a master electrician to fix large wiring problem for an apartment complex then it would probably be better NOT to buy that particular fixer upper property. If you ignore this advice, you could end shelling out more money than you've budgeted which will dip into your profit margins.
3. If you have a smaller budget, consider fixer upper properties that are in need of cosmetic repairs like adding new fixtures like door knobs, ceiling fans, toilet seats, painting or landscaping. These types of repairs will definitely add value to the home which will equal more money to you.
4. If you don't have the funds to complete all necessary repairs, either don't buy that particular property, repair what you can, be willing to sell the property "as is" and profit less, or offer buyers a renovation stipend.
5. Purchase fixer upper properties that have good resale value. For instance, studio condos tend to be very hard to sell in good or bad markets whereas 3-4 bedroom houses with at least 2 baths tend to sell really well, regardless of the economy. In conclusion, if you're serious about fixer upper investments then you must rehab it so it holds its own, work within your budgetary constraints, complete necessary repairs that are within your competency, purchase properties with good resale values. Good luck!
