Are you thinking about buying a property to invest in and flip for a sale? There is a lot of potential in low-cost investment properties, and if you go about the process right you can walk away with a nice profit. It’s important to do your homework before you make your final decision, so make sure you’ve taken care of the following before you buy an investment property.
Investors everywhere are finding great opportunities in real estate, which is why investing in real estate has increased substantially over the past few years. Low-cost properties offer the opportunity for investors to buy low and flip the property for a healthy profit, if done right. There are a few guidelines for fixing up these kinds of investment properties in order to maximize their appeal to the buyer while maintaining a healthy profit margin. Finding the right balance here is key. Let’s talk about some strategies you can use when fixing up an investment property to maximize the margin.
Do your homework on the neighborhood.
You want to make upgrades that bring the property in line with others in the neighborhood. If it doesn’t meet the standards of the average property in the area, you won’t attract buyers. The same goes for upgrades that are high above the standards of other properties in the area. A good example is the home’s cooling system. If window units are the standard in the area, you won’t earn back the money you invest in central air conditioning. On the other hand, if central air is the standard, anything less than this is going to turn buyers off.
Out of sight? Not out of mind.
While you’ll want to focus on making the house look as attractive as possible to the buyer, make sure to place the same amount of effort into what goes on behind the scenes. Plumbing, heating, cooling, electricity, and wiring are essential components of a home that you don’t want to skimp on. If any one of these systems needs work, the best thing to do is to hire a licensed contractor. This ensures the work will be done correctly and to code.
Give high-traffic rooms plenty of attention.
The two most used rooms in the house are the kitchen and the bathroom, so devote plenty of time and resources to bringing these rooms up to the standard of the market in the area. A good way to find out what similar homes in the area look like on the inside is to attend a few local open houses.
Sweat the small stuff.
With investment properties you want to make improvements that will return at least twice what you put in. Expensive upgrades like new windows aren’t likely to do this. But small upgrades will. Things like fresh coats of paint, new doorknobs, new cabinet pulls, and new faucets can help you get the return on investment you’re looking for.
Don’t forget the flooring.
If the flooring is carpet, it’s most likely seen the best of its days and is worth replacing. If carpeted floors are the standard in the area, then go with carpet. But, you might find there’s a nice hardwood floor underneath the old carpet that’s worth refinishing. Hardwood floors are always in demand, and refinishing an old hardwood floor can help boost the value of your home.
Boost curb appeal too.
Before a potential buyer even walks in the door, their first impression of your house will be of the outside. Put your best foot forward by cleaning the siding, mowing the grass, and taking care of a neglected landscape.
Source
http://www.frontdoor.com/real-estate/7-tips-to-fix-up-a-foreclosure-without-breaking-your-budget