You read inspiring stories in Time and Forbes about how someone struck gold in the real estate business by investing in properties by being at the right place and at the right time. Dealing in real estate is serious business for some and a hobby for others. A person can go from rags to riches and from riches to rags, in this billion-dollar industry. Investing in properties especially a rehab project can be tricky if you’re a rookie. However, you need to take your time and opt for the right house before taking the plunge in rehabbing a house for investment purposes. Let’s look at things you’ve got to abstain from when it comes to renovating a property.
Assuming you know it all
Confidence is good but, over-confidence can put you in a spot. If you’re new in this arena, it’s better to gauge what works and what doesn’t when you’re contemplating renovating a house. You don’t go to a battlefield without your weapons, do you? Absolutely not! Thus, explore the house and its interiors thoroughly. Look for possible leakages, cracked window panes, broken roof shingles, rusted taps and flimsy electrical appliances. Take pictures of them to help you remember what you saw. Think about what needs to be done with the property before putting it up for sale. Don’t let your emotions overpower you and be rational. Getting an estimate on rehabbing the whole house will give you an idea of the price you’ll quote to real estate agents and potential buyers soon after.
Misusing your finances
You’ve finally decided to rehab a house. What next? You’re going to want to start as soon as possible and for that you may need liquid cash. Spending your life savings on rehabbing a house is not a wise move. Many have done this in the past realizing it was the biggest blunder they could commit. Investing in real estate can be your calling but, you need to take one step at a time. Being impulsive in monetary matters won’t reap benefits. Find friends or acquaintances who are looking to invest in real estate just as you are. You could potentially pool your financial resources for a rehab project. In this way, you don’t put all your hard earned money on the line and at the same time, and you start by earning small profits. Hopefully this will lead you to become a bigger fish in the business. Just remember to be patient and take it slowly.
Hiring the wrong people
This is the house that’s going to be for sale and people are going to be looking closely at it. For that, you’ve got to ensure you put the right men on the job who will make it look presentable and liveable for potential buyers. Look for good contractors who are skilled in their niche. You don’t necessarily need a high-profile company who caters to big-shots. But look for professionals who are diligent in their work and someone who provides superior quality services with the budget you have in mind. Again, if you aren’t sure of what looks best in terms of colours, style and aesthetics, there is plenty of content on the Internet that can help clear your muddled thoughts and give you clarity.
Overpricing the property
Everything is done, the lawn looks great and the house looks fabulous. Now is the time, to put it out there for people who may be interested. With that being said, it brings us to an essential question. What’s the cost of the house and how do you come up with a figure? This is where many investors face road-blocks with regards to pricing a property. The main idea behind investing in real estate is to gain profits fast. However, over-pricing a house, condo or an apartment will shrink your chances of getting high returns. You don’t have to be an expert to predict that. Therefore, study the market rates well for villas, apartments, and homes. Once you have a clear picture of the real estate market, you can then quote a price for the house that’s reasonable and which will eventually get you lots of buyers.
Working in real estate can be a rewarding experience. You’ll make mistakes but, you’re going to learn a lot by getting your hands dirty and absorbing all the nitty-gritty. Once you’ve got that settled, you’re in business.