Renovations usually add value to a property, so is it better to buy a newly renovated one? In this article, we go over the factors that come with buying renovated versus unrenovated properties.
Renovated or Unrenovated?
When buying properties, it depends on your taste and how much money you can pay out of pocket.
If you buy a property that is already renovated, you are paying your premium. You are paying the building and a premium for someone who has already done the work.
Whereas, you can put that equity in if you buy an unrenovated property. However, you will need an excellent general contractor, or you need to be handy yourself and know the process.
Because, unfortunately, sometimes renovations drag on. They go over cost and can’t be financed right typically unless it comes with a 203 loan. But in most cases, you will pay for those renovations out of pocket. You can’t loan it and borrow it as if you were buying the house.
So, what ends up happening is that sometimes these renovations go over, and the timing is messed up. Before you know it, you are already into the winter months and having a hard time renting out the property.
The Right Way to Decide
You want to figure out when to close your properties so you know how long it will take to renovate your property, get it on the market, and rent it out.
Personally, I love buying properties in January, February, or March, depending on how much work the property needs. I timeline out that work, get it on the market for the spring and summer months, and rented out at full cost. It doesn’t always happen, but again, it depends on the size of the renovation.
The next thing is picking out a team to achieve that timeline. As a real estate agent and general contractor, I help many clients and guide them through the renovation process. Even if they’re not doing it with me, I assist them in finding out how much it costs and how long it should take.
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