Your Rehab Repair Budget: Where to Start?
By [http://ezinearticles.com/?expert=Joe_P_Abbascia_]Joe P Abbascia
Some investors are able to locate properties that have it all going for them - looks, price and location. These properties are not the norm. While there are dream properties available from time to time, the most widely available properties are those that need some sprucing up or repairs. The good news? Investing in these properties gives you greater potential for explosive profits. In this article I'm going to give you some advice about how to rehab for maximum profitability.
There are two main approaches to establishing a game plan for property rehabbing:
1. Making targeted, strategic repairs designed to gain maximum value from limited rehabbing dollars; and,
2. Completely gutting the interior and rehabbing from a shell
While top-to-bottom rehabs have the potential to add the most value to property, they're also time-consuming -- and expensive. For this reason, most investors opt to confine their rehabbing efforts to those areas of a property that stand the greatest chance of increasing value... at the lowest cost.
While the average property might have 1,500-2,000 square feet, different parts of a home have greater importance to the end buyer. By focusing your efforts in the areas of a home most important to the end buyer, you can increase the likelihood that you'll sell quickly -- and have the ability to quickly reinvest your profits into another property:
Kitchens - Countertops, cabinets and lighting are the gateway to kitchen appeal. When making these repairs, understand that the average family spends a lot of time in their kitchen. If the countertops need to be replaced, give some thought to installing a good quality granite countertop. They look great, last for a long time, very durable and have a much higher perceived value than lower quality countertops. Other items on your rehab list could include; re-facing cabinets recessed lighting, flooring tile and stainless or stainless look appliances.
Baths -- While most people don't spend a lot of time in the bathroom, they like their time to be pleasant. So make sure the tub and/or shower and the vanity are in good shape. If they're not, consider either replacing these items with new or for a cost effective fix, paint all the cabinets white; replace all the hardware and add new bath fixtures; your buyers will love it! No bathroom rehab is complete without a good quality floor. Avoid the temptation to go with cheap linoleum. Spend the money on tile. You'll be glad you did and amazed at what's available for under a $1.00 a square foot!
Master Bedroom --The master bedroom is a couple's sanctuary from the world. As a result, it's important that it look good. Fortunately, eye appeal in the master bedroom isn't overly difficult. You'll be amazed at how far new paint and carpet will go in enhancing the appeal of an otherwise drab master bedroom.
Common areas and secondary bedrooms -- Next, get to work on the rest of the interior of the house. While you want these areas to look good, you won't need to spend as much as you do on other parts of the house. Unless the walls are freshly painted, add a new coat of neutral colored paint. Clean the carpet; if it is badly worn or stained, replace it with a mid-priced carpet. Should you have hardwoods, then consider refinishing them, a coat of polyurethane goes a long way in creating a new look, the floor is the first thing that strikes the buyer either in a positive or negative way! Also don't overlook the wall switches and covers.
Does the outside siding of the house need paint or have asbestos shingles that needs to be sided over? Are the windows old and drafty? Is the roof showing signs of worn shingles? If so, you'll need to add these items to your rehab budget. Should the exterior siding be in good shape, you might want to consider chemically cleaning/ power washing the house. It can improve the visual appeal of a property and increase the likelihood that the property will invite buyers inside for a closer inspection.
Curb appeal plays a huge role in the desirability of a property. Fortunately, this is a relatively easy fix. Potential buyers prefer to avoid homes with badly cracked, chipped or broken driveways, at a minimum, clean the driveway thoroughly with a chemical cleaner and repair any bad spots and sealcoat it, should the cracks and holes be out of control, then consider re-paving it. Clear away excess greenery from around the house, clean up the yard, and create a mulch bed in the front of the house around the foundation area and plant small bushes and flowers. These items aren't expensive, but again, they add tremendous value.
Developing a repair budget can be challenging at first, but it's worth it. Once you have your list of repairs, prioritize it. As I said earlier in this article, kitchens, bathrooms and the master bedroom are the most critical parts of a home's interior. Focus your efforts first in these areas.
It is possible to create real value on a somewhat limited budget. The time to decide what needs to be done is during your initial planning stage. By learning how to estimate repair budgets before purchasing property, you can determine going into an investment how much you expect to earn for your efforts.
Joe Abbascia helps real estate investors at all stages of their investing careers to learn effective strategies to buy properties wholesale and capitalize on profitable opportunities. Profits are available in any market. You just need the right tools. Learn more about Joe and how his unique investing style can help you reach the pinnacle of success by visiting [http://www.PropertiesCentralWholesaleDeals.com]www.PropertiesCentralWholesaleDeals.com - today.
Article Source: [http://EzineArticles.com/?Your-Rehab-Repair-Budget:-Where-to-Start?&id=6689240] Your Rehab Repair Budget: Where to Start?