A Few Do’s and Don’ts When Rehabbing an Investment Property

rehabbing investment property

by Ronnie Adams

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Many new investors make the mistake of treating their newly purchased property as more than what it is, an investment property. Investors who are just starting out will make the mistake of rehabbing a property as if it is their personal home. This attitude generally will lead to spending unnecessary amounts of money on repairs and upgrades that are just not required. How you plan and execute your rehab strategy will have a direct impact on your bottom line and the success of your business.
When rehabbing your investment property, treat it as a business deal. As an investor, you must think profit first. Don’t spend more money on the property than the area can support in rent. The amount you spend on your rehab will have a direct effect on your mortgage payment. Higher rehab costs will result in a higher mortgage payment. Remember, the rent you charge must be comparable to other rents in the area, it must be high enough to make the mortgage payment and it should yield a monthly profit for your business.
The highest grade carpet will look and feel good but there are less expensive grades that will serve the same purpose. You don’t need to spend extra money on ceramic tile. Use less expensive vinyl products that have a ceramic tile appearance. Use basic lighting and plumbing fixtures rather than more expensive pieces. Basic fixtures still look nice and will meet the needs of the renter. Always keep in mind that your investment property is used for one thing; making you money.
Your property is not only an investment unit, its’ part of your business. Always conduct your business wisely and with strong business ethics. You will make all the necessary repairs for your tenant to live safely and comfortably in the home. You want your property to be appealing to renters, but you don’t have to go overboard. While it’s important to add your personal touch, you must also make smart financial decisions in order for your business to survive.

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