Why Real Estate Rehabbers Can Resell Properties for Premium
It’s amazing what a real estate rehabber can do for the “dog house” in a neighborhood. Last year in our own neighborhood, a real estate investor purchased a dilapidated home that was previously owned by an aging couple. The house was had extreme deferred maintenance and needed at least $100,000 in rehab to get it back into shape. Within 5 weeks, the rehabber had turned that “dog house” in our neighborhood into one of the nicest homes on the block and resold it for top dollar.
These are the types of real estate investors that we lend money to do these types of rehab projects. I’m always impressed to see the final product. But how and why are some real estate rehabbers able to fetch premiums for properties they fix up and later resell? Because we are a real estate lender and are able to see some of the “tricks of the trade” of our real estate investor clients, we would like to share them here. Here are 4 reasons why real estate rehabbers can resell a property for a premium:
1. A Knack for Finding Niche Neighborhoods: Real estate rehabbers have a talent for finding properties in the most sought after neighborhoods where property listings last days or weeks at most. These are the opportunities for the highest price premiums.
2. Home Staging: Dressing up a vacant property is shown to yield price premiums. The elements of design, style, and visualization are strong factors here. Check out a recent blog post we wrote for using home staging to sell a home fast and for a premium: https://privatemoneyutah.com/hire-home-stager-help-sell-home/
3. Addition of Modern Elements: Real estate rehabbers tend to focus on adding modern elements to a home to get price premiums. Some examples include: Addition of shingle siding or slate stone on exterior walls in sections around stucco or wood siding, addition of contemporary outdoor and indoor light fixtures, designer paint colors on exterior trim and walls.
4. Patience is a Virtue: The turnaround time on a real estate rehab varies greatly by project. Depending on the season, weather conditions, and current market conditions, a property may take longer to sell than anticipated. The most successful real estate rehabbers are able to get top dollar because they are patient. I’ve seen properties take as long as 10 months to sell. Properly budgeting for holds as long as this can allow a real estate investor to fetch a premium by waiting for the perfect buyer.
Thinking of selling a property this year? If you want to fetch a premium for the property, pay attention to some of the tactics used by the most successful real estate rehabbers.
Posted by Corey Curwick Dutton