It is an old yet profitable investment property management strategy to buy a rundown property and then fix and flip it to earn cash. While most of the asset management real estate investors need to wait for long periods before realizing any profits, fixing and then flipping rundown properties is a smart way to earn revenues in real estate market.
To be able to successfully do this, investors need to spot potential in the property by making sure that the expenses of fixes will not exceed the net worth of the property. Your investment property management company can greatly help to spot this potential. You basically need to look for following latent aspects:
Sound Structure
Even if it is a non-performing property, look for sound structure with zero major defects. Or else, you would need very costly renovations to make it sellable. See if the property can be made better with minor fixes. In case you are not sure, ask your asset management real estate company to perform an inspection.
Good Location
No matter how good you can make that rundown property, if it is not at a good location, buyers will not buy it. A good location is one with minimum crime rate, effervescent neighborhood, easy access to public transit & other facilities. Properties at good location attract both – buyers & renters.
No Tenants
Make sure there are no tenants in the building and if there are, ensure that they are ready to vacate once you buy it. This is important so that you can immediately start the renovation works.
Good Site for Cosmetic Repairs
Cosmetic repairs can easily and cost-effectively enhance the look of the property. You need to look for a building that could look superior merely with a fresh coat of paint and little landscaping. Indoor cosmetic repairs may include fixture replacements, new carpet or some new appliances. Even entrenched investment property management companies suggest that major kitchen or bathroom renovations will not fetch you enough value of investment.
