The most important step that you should take when considering fixing up your investment property would be to budget your remodel. Your budget should also portray which direction you want to take your investment property, either renting it out or flipping it. Considering the market we are in currently, flipping has become a little tough, although not totally impossible. For the newbies, who haven’t seen shows like Flip This House or Flipping Out, flipping generally means buying a house, fixing it up and selling it for a profit. This phenomenon was all the rage when the real estate market was at its peak. I believe the residential real estate market has bottomed out, and we are now currently in a climb, and it is still not too late to wake the sleeping investor in you. Here are some ways to insure that your remodel goes smoothly:
Plan Your Remodel
After the budget phase of your remodel, take some time to figure out what you want to do in your investment property. Your budget might be a big one where you would like to tear down walls to make some rooms bigger or a very small one where you just need to add a few more things to make the property attractive. It all depends on your property and your budget. Regardless, make sure you take a thorough look of every nook and cranny of your property to see that nothing is missed. Plan in your head or write down points of what you would like to do, or how you envision your property all completed. If you are absolutely out of ideas, consult your realtor or have some like-minded friends come over and critique your property. Your last option would be to consult your contractor or handy man, however remember they are out to make more money for themselves and they might even recommend adding on additional work which will lead to you expanding your budget. This step is very crucial in knowing where you want to take your property.
If you don’t have a contractor or handy man in mind, it is always best to get to know someone through a reference. For example, your realtor would have worked or would know of a handy man or contractor who could help you with your project. Trust me, with the job market we are in, most people don’t care how small or big the job is. If you don’t have a realtor friend, your next best friend would be the yellow pages. Go through and pick a few and interview them, yes I said interview them. Why? Because technically they will be working for you, ensuring that your vision for your property comes to fruition. Also ask them for references and even pictures of similar projects they have worked on. Most contractors / handymen will be eager to show their previous projects to you and also get you in touch with a customer who has been highly satisfied with their work. Ask the right questions and learn from the mistakes of others.
Compare and Contrast: Big Company VS. handyman
It is essential that you get a quote for your job from several people, both from big companies and handymen. This way you can compare and contrast not only the time frame each of them would take; but more importantly how they manage to fit all your goals for your property in your budget. After you have short listed a couple of the potential contractors, sit down and discuss with them to see if they can work with you a little more on the budget. You will be surprised to find out that even their final quote is still negotiable. However, there will be instances where their final quote IS their final quote, move on to see if any other contractors or handymen that will work with you on the price. Also when comparing big contracting companies with handymen, remember, sometimes the bigger company might charge you a little more as they have a lot of overheads they need to take care of. At the same time they might have a few of their employees that will work on your property and finish it off in a lot faster time than a handyman can. The plus side to the handyman is that the quote might always be lower than the big contracting company. It really comes down to what you are looking for and what fits your budget, both time and money.
Stay within the Budget
This is another important step in your remodeling project. There will always be instances where things may go out of budget, but try your hardest to stay well within. A good way to avoid going out of your budget is to lower your actually budget by a couple thousand dollars, this way even if there are mistakes or unknown during the remodeling process, things will work out. Also remember if you have bought a foreclosure or short sale, chances are that you might not have had the opportunity to have the property inspected prior to purchasing it. During your remodeling process, things may pop up that seemed to be alright, so it would always be a good rule of thumb to keep a reserve budget for such instances.