The Important Aspects of the Process of Rehabbing Homes

The Important Aspects of the Process of Rehabbing Homes

Also known as fix and flip, the business of rehabbing homes involves the process of renovating an old and undervalued houses and then selling them for profit. Although rehabbing is probably one of the most "straightforward" methods of investing in real estate, doing a rehab project is not exactly that easy. There are lots of things to be done aside from ensuring that the buyer will love the property's new look.

A fix and flip project begins with the search for the right fixer upper home. The process of looking for the perfect handyman special usually takes a lot of time. It is because rehabbers have to make sure that the property they are going to renovate is capable of fetching a good price and attracting a good deal once it has been repaired and renovated. So if you're going to choose a rehab project, see to it that the property is located in a nice neighborhood and has proximity to important public amenities.

The process of choosing a property to rehab, however, doesn't end there. Once you have spotted the house of your choice, you have to do your numbers next. When doing the numbers, the first thing you need to do is to determine the after repair value of the property. This can be done by hiring a professional appraiser to take a good look at the house. If you have a background on doing appraisals, you may choose to complete the task yourself.

After identifying the expected market value of the property, the next step to rehabbing homes is to calculate the projected expenses. Common expenses include the cost of repair and renovation, money spent on the purchase of construction supplies, property taxes, homeowner's insurance, loan fees, and sales commission. Once you're done with the computation, you may now subtract the total of the projected expenses from the expected selling price of the property. The difference will be the amount of money you'll earn from the rehab project.

If you're satisfied with the result of your computations, you may start the renovations on the fixer upper home. When doing the repairs, always stick to your budget and work schedule. This can help prevent you spending too much time and money on the property. Always keep in mind that the longer the property stays with you, the lower its market value will be.

For more tips on rehabbing homes, go to www.Rehab-Real-Estate.com.

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