Rehabbing Homes in a Challenging Market
by B.E. Conrad
Back when the real estate market was on fire it seemed that house flippers simply could not lose. Even those working in less than desirable parts of town could easily buy run down properties, quickly spruce them up and flip them for a fast profit. By now most of that easy money is gone, and in many parts of the market the house flipping and investment markets have come to a screeching halt. As many homeowners struggle to make their payments and home values continue to fall, investors are having an increasingly difficult time making money off of the real estate portfolios they have accumulated.
Buying and selling properties in such a market has its own unique set of challenges, and these challenges have forced rehabbers and other real estate investors to focus their efforts on those things that will add the greatest resale value to the properties they hold. While the rehab efforts that will give the biggest bang for the buck can vary quite a bit, some of the items rehabbers should consider include:
- Landscaping - no matter what the nature of the local real estate market, curb appeal is absolutely essential. In a buyer's market curb appeal becomes even more indispensable, and no rehabber or real estate investor can afford to ignore its importance. A buyer who is struck by a drab landscape or a bad looking exterior is likely to keep driving in search of a more suitable property. Investing a few dollars in proper landscaping can yield thousands of extra dollars at time of the sale. And this type of curb appeal can help drive more traffic to the property, possibly shortening the time it spends on the market and fattening the final selling price.
- A simple coat of paint - while the days of buying a run down property, slapping on a fresh coat of paint and reselling it may be over, the importance of a good paint job has not gone away. Giving the exterior doors and shutters a fresh coat of paint in bright and tasteful colors adds significantly to curb appeal, while painting the interior can make the home look newer, larger and more inviting. Investing in a fresh coat of paint can provide a great return on investment, especially if the owners can do the work themselves.
- Updated appliances - while a new kitchen or bathroom may be out of reach for many rehabbers and real estate investors, simply replacing old appliances can provide an excellent return on investment. In a tough real estate market buyers are likely to have many more choices at their disposal, and this wealth of choices allows them to be more picky about the type of property they purchase. New appliances can help seal the deal and please those demanding buyers.
- New lighting - new exterior lighting can make a home look more attractive and safer. There are many lighting options available to real estate investors, including some that are quite affordable and easy to install. Simply installing a new set of exterior lights can make an old home look more modern, providing an increased resale value at a low cost.
The challenging real estate market we find ourselves in forces home sellers to be more creative and accommodating than ever. Real estate investors, house flippers and rehabbers need to be able to spot the best home improvements and recognize which ones will provide the greatest value for their limited funds. While there is no doubt that buying and selling houses in such a market is more of a challenge, the good news is that there is still plenty of money to be made for smart and savvy home rehabbers.