“You paid way too much for that Investment Property!”
The first time you hear it from someone, you want to call them an idiot and dismiss it. The tenth time you hear it on the same property, you want to call yourself an idiot and quit real estate investing forever. The key is to cut down the renovation budget, but to do it smartly so that you don’t hurt the value of the home. Let’s talk about some tricks that will aid in this effort.
The importance of a great kitchen
The kitchen is king. It can sell a house all by itself. Find someone who does a lot of cooking and get their opinion on the layout. A smart layout can trigger an emotional response from your eventual buyer. This also is just simple planning if you are doing a complete overhaul on the kitchen. If you are just dressing up the existing kitchen, think about simple changes that can make the space more functional. Different expos and showrooms can offer ideas on this subject.
Give the bathrooms a facelift
After the kitchen, the bathrooms are often the second most important rooms to update. Replacing a dingy toilet seat, cracked shower tiles, or an old, discolored floor can make a huge difference in the look of a bathroom. Vinyl tiles are inexpensive and easy to apply and in some circumstances can actually be applied on top of the existing floor.
Choosing design materials on a budget
Don’t be afraid to use different materials when they can save you money. A thrifty buy can easily be explained as a design choice. Try to limit it to 2-3 different materials per space or your “design” will look like a granite monster barfed all over your house. Put some thought into it and follow neutral trends. It will give your investment property an updated look and appeal to wide audience.
You need to find out what is important in the neighborhood. Hopefully you have already done this but if you need some help, you can check with your realtor or your wholesaler. We need to know what home upgrades buyers want to see. What are they willing to pay a little extra for? This reconnaissance will pay great dividends by making your improvements more efficient and helping your house to sell faster.
When the house sells and you squeeze out enough profit to make that nervous feeling leave your belly, it is now time to call all of those people who tried to tell you what a mistake you made and bang your fists against your chest. You are King Kong and this is your house! Don’t forget though, if this is one of your first investment properties and you only broke even, it is still a win! Experience in real estate investing is just as good as a profit when you are a beginner.
The first rule of real estate investing is to buy low. Not just low, low enough to accommodate some unexpected hiccups.