Rehabbing a house is one of the most popular exit strategies in real estate investing. Real estate investors of all backgrounds and starting points have come to know the benefits of real estate rehabs. To start rehabbing houses, carefully lay out your goals and identify which rehab type best aligns with your situation. Learn the process before taking on your first project, and don’t be afraid to start small. In this article, we will go over some common problems buyers face when rehabbing a property.
1. Finding the right property
One of the biggest challenges real estate investors face when buying a property for rehab is finding the perfect real estate to invest in. A new investor will face several problems when starting, and lack of access to property listings is one such problem. When new to the market, you will most likely have no prior connections or networks in the real estate world, making it challenging to locate the best properties. Connect with renowned and verified real estate agents to learn about possible investment opportunities.
2. Inaccurately Calculating Project Costs
Poor estimations are typically the result of a lack of preparation and education. Investors are advised to conduct their due diligence to mitigate any risk of performing a wrong estimation. Impatient investors often need to accurately calculate repair costs before bidding on a house. Inaccurate repair costs may impact any ROI you hope to attain. As a rule of thumb, expect repairs to cost more and take longer than anticipated. It is essential to understand how much time and money you will need.
3. Failing to maintain the property after the rehab
You have completed your rehab and are ready to sell it. All your hard work is about to pay off. However, it is not the time to let your guard down. There is still work to be done. Sometimes an adequately rehabbed property won’t last more than a couple of hours on the market. However, there is still a possibility of the home staying on the market for longer than expected. In this scenario, many investors make a common mistake- neglecting to maintain the property while it is up for sale. Over time, even the most excellent properties can begin to look uninviting. Maintaining curb appeal is just as important as creating it.
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