- A home inspection is essential when considering salvaging a real estate property to identify underlying issues or potential problems.
- Experienced partners such as general contractors, electricians, plumbers, carpenters, and interior designers are necessary for successful renovations.
- Obtaining permits related to construction projects is critical before starting any work on the home to avoid costly fines or legal trouble.
- Utilizing marketing strategies like social media can help reach a larger audience interested in buying the house and potentially yield a higher return on investment.
Real estate is incredibly profitable, no matter the current market conditions. Investing in real estate properties can provide a steady income for many years. It can often result in a significantly higher return on investment than other investments or savings. In fact, according to a report from the National Association of Realtors, the median existing-home price in the United States in 2019 rose by 8%, while incomes only rose 4%. This indicates that real estate investing is likely more profitable than other investments.
Statistics also show that flipping houses are one of the most lucrative investments in real estate. More than 5.5 million existing homes were sold nationwide in 2020 alone. The report states that 63% of those flipped homes were purchased with financing; this suggests plenty of opportunities for investors to capitalize on this potentially lucrative form of investing. Furthermore, flipping homes yielded an average gross profit margin of almost 49%, according to ATTOM Data Solutions’ statistics.
However, not every real estate investment is a slam dunk. Your property might need more work than just a traditional flip. If you have to salvage a property, here are a few steps to consider.
Home Inspection
A home inspection is critical when considering salvaging a real estate property. An experienced inspector will be able to identify any structural or other issues with the property that could indicate high renovation costs or other potential problems. Even if the property looks great from the outside, there could be underlying issues that you wouldn’t be able to detect without an inspection.
For example, the inspector will check for foundation problems such as cracks, shifting, or settling. They’ll also look for issues with electrical wiring, plumbing repairs and replacements, roof damage, and water damage throughout the home. These are all critical factors to consider before deciding to invest in renovating a property. Otherwise, you may invest money in expensive repairs that won’t yield a return on your investment.
In addition to inspecting the home’s physical condition, an inspector can help identify any zoning or permitting issues you may need to address before renovations. This includes checking for permits related to construction projects such as building additions or major remodels like kitchen and bathroom. It’s essential to make sure these permits are obtained before starting any work on the home since doing so without proper approval can result in costly fines and even legal trouble in some cases.
Find the Essential Partners
In addition to being an inspector, you’ll need to find reliable partners for the renovation work. If the home is in a state of disrepair, it may require specialized contractors for specific projects that require special attention and expertise. Here are a few you might need:
General Contractors
General contractors from experienced architectural design firms can help with structural changes to the property. They’ll be able to assess the condition of the existing structure and determine what type of repairs or renovations are necessary for a successful flip. General contractors can also provide guidance on which permits may need to be obtained before beginning work on any project.
Electricians
If your fixer-upper has outdated electrical systems, you’ll want to hire a licensed electrician for safety reasons. They can repair wiring, add outlets and switches, install light fixtures, replace old breaker boxes, and more. Make sure you verify that their license is up-to-date before hiring them for any work on your real estate investment property.
Plumbers
Old plumbing is notorious for causing costly water damage throughout a home. Before beginning any renovations, you’ll want to hire a licensed plumber to ensure the home’s plumbing is up-to-date and in good condition. They can also help install new fixtures like faucets, toilets, and baths.
Carpenters
Carpentry services may be required if your fixer-upper needs significant structural repairs or additions. A skilled carpenter can repair any existing damage, build custom features for the home (such as built-in shelving or cabinets), and even construct entirely new rooms if necessary.
Interior Designers
Of course, selling a property will require more than just repairs and renovations. It will also need a great design to attract potential buyers. Hiring an experienced interior designer can help create a cohesive look throughout the attractive and functional home. You’ll want a plan that considers the property’s location, target market, and any specific features of the house that could be utilized for maximum appeal.
Utilizing Marketing Strategies
Finally, you’ll need to create a plan for marketing the property once it’s renovated. You may choose to enlist the help of a real estate agent who can list and advertise the home to potential buyers. Or, if you prefer to do it yourself, plenty of online resources and platforms are available that allow you to market your renovated property directly.
Social media is one of the best ways to get the word out about your real estate property. You can create content showing before and after pictures or videos of the home and post it on platforms like Instagram, Twitter, Facebook, and more. This will help you reach a larger audience who may be interested in buying the house.
Final Thoughts
Considering these steps before investing in salvaging real estate properties, you can ensure that every investment is sound with minimal risk and great reward. Real estate investments have historically proven profitable as long as investors take the time to research before getting started.
