Remodeling a single room can be hard work as it is but imagine having to do an entire house from scratch? It can be particularly taxing for first-time investors who can get overwhelmed with the entire lengthy process. The key is to take it one step at a time so that you can fix the property in its entirety. Some of the basics you need to keep in mind include:
Before getting to work on a fixer upper you might need to ask permission first. A work permit from the municipality should do the trick but bear in mind that each one has its own requirements. For example, if you want to remove or replace siding or install more walls, you will need special permission for it. Smaller tasks such as painting or updating floors do not usually require this but if your fixer upper needs a lot of work, prepare to apply for several permits at once.
Generally, to save time and effort it will be a good idea to check with the city or contractors yourself so that you can be prepared for extra expenditures. If you fail to acquire appropriate permits, you might have to pay hefty fines which can negatively affect the loan you have taken for it.
Your fixer upper will require a lot of repairs and this will have a profound effect on its market value. The best thing to do for this is to hire a structural engineer to estimate how much that can be. This way you can determine whether you have the budge to cover them all or not.
Make a list of all of the repairs that need to be made around the house and calculate them. The figure you get should be added to the current value of the house and will also provide a ball park figure of complete estimates.
The rooftop is ignored by most investors during their evaluation to their horror later. Keep in mind that roofs have to be checked for loose shingles after every 15 to 13 years or so and should be inspected twice each year for replacement.
During your examination check which shingles are loose, losing texture or curling in on themselves. In fact, even if they seem fine on the surface, chances are the material has lost its capacity to prevent water damage.
A professional home inspector can help you with all of these and provide a relevant course of action according to your budget.
JC Underwood is the director at the Metrolina Real Estate Investors Association, which provides education, mentoring, and networking for real estate investing in the Charlotte region. He can be contacted at jcu@MetrolinaREIA.org. For more information, visit www.MetrolinaREIA.org.