Things You Need to Know About Investor Rehab Projects
Investor rehab projects can go terribly wrong if you don’t know what steps you first need to take and what improvements will maximize your investments. Here are a few things to first consider so you can enjoy your finished project and avoid the bumps in the road.
Here are five things you may not know about your investor rehab project:.
You may need a permit for your investor rehab project
Every town has its own rules, but most major work (such as taking down walls, installing fences, updating plumbing and electrical systems, and cutting in new doors and windows) will require a permit.
With certain permits come the even-more-exciting inspections process. If you’re DIYing, it can take quite a bit of research to figure out exactly what permits you need and how to go about getting them. Hiring a contractor can take some of the sting out of the process.
Depending on your town, the rules may still require the homeowner, not the contractor, to obtain the permit, but a pro will be more familiar with the system and can help steer you in the right direction.
Improvements may not pay off
Most homeowners think they are instantly adding to their home’s resale value by upgrading and remodeling. But out-pricing the market with fancy interiors is going to cost when they try to sell their home.
For better chances of recouping your costs, stick with the going range of the neighborhood. Certain home improvements are almost guaranteed to bring a good return-on-investment when selling a home. These include updating bathrooms and kitchens, which are always important to buyers.
You might also consider finishing the basement and adding a bathroom. Neutral finishes and standard appliances are your best bet for resale value.
Hiring a professional may be cheaper
When it comes to number-crunching, a professional might actually come out cheaper in the long run. Make sure to do your homework and get a few quotes before committing to doing it yourself.
Don’t forget to include the intangibles: your own time, energy, interest, and skill levels, as well as how long you can live in a work zone.
If you do it yourself, you may be getting into costs you didn’t anticipate, such as equipment rentals, bribing friends to help, and needing to take time off work. Any home improvement project — DIY or professional — is likely to go over-budget, so either way, factor in at least 10-percent overages.
Good contractors book months out
No one ever tells you this when you’re strolling down the aisles of the latest bathroom fixtures, dreaming of relaxing in your new spa tub by the end of the month. Sure, some contractors are available right away. But that means they aren’t booking jobs. Good contractors will be booked months out, so be sure to schedule accordingly.
Aside from being well-booked, how can you tell a contractor is a “good” one? Be sure to get recommendations from friends and family. Ask potential contractors for a list of past clients and current projects, and inspect the work they’ve had done, if possible.
Of course, make sure the contractor is licensed, bonded and insured by asking for proof. Finally, don’t forget to ask about subcontractors and who they work with, and research those names for your investor rehab project
Reusing materials may cost more
Trying to be conservative with materials can be a pricey proposition. Many home owners ask contractors to try to be stingy with materials, but this will end up costing much more in time. It’s usually less expensive to cut into a new 2×4 than to pay the contractor the extra time it will take to reuse one.
The same goes for repurposing old or salvaged materials. They require extra TLC, and your contractor and team are a well-oiled machine. So if you’re hoping to re-purpose old, salvaged, or extra materials for the job, be sure to lay out these expectations ahead of time and be aware of the extra cost.
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