The real estate market is a fantastic place to create financial growth for those with an eye for that diamond in the rough property. But fixer-uppers can cause a lot of headaches as well if you aren’t careful when picking a property to secure as an investment vehicle. Choosing the right house can be the difference between a major profit and a bitter loss of capital. Thankfully, there are some things you can do to improve those odds before you ever put in an offer.
1. Keep a careful eye on your credit score.
Your credit worthiness is more than simply a number. It’s the gateway to great interest rates and expanded options for home loans. As a borrower, you have to convince lenders that you are a good bet financially, and maintaining great credit health is the best way to prove this over the long term. Before even considering buying that house to flip, think about how much credit card debt you owe and contemplate ways to reduce it in the months leading up to your entrance into the real estate game. The less you owe overall, and in relation to your available line of credit, the better you look to banks seeking to give you money for new, big purchases. You can continue reading here for more information that can help you to choose the best option.
2. Consider your mortgage options.
When buying any home it’s important to compare home loans. This becomes an absolute priority when purchasing a home that you want to renovate to flip or reimagine as your dream home. These houses will need additional work on top of the down payment and mortgage, and that means additional time and money. Your fixer-upper will likely require you to continue your monthly payment in rent or mortgage at another property while simultaneously draining your available cash as you make necessary upgrades across the property. The better your home loan on this property the less financial strain you place upon yourself as you prep the new home for move in or sale. A lower rate can save you tens of thousands over the long haul, or save you from bankruptcy in the short term as you juggle two monthly payments.
3. Get a handle on any major projects right away.
Take care of the big problems first. For example, sewer line problems are a major drain on most fixer-upper projects. It’s one of the costliest and longest repairs that can befall a new homeowner. The good news is that the ability to fix these issues with trenchless pipe and sewer in Atlanta have created digital solutions to a formerly catastrophic problem. Trenchless services have been deployed to diagnose the problem with underground camera equipment and repair or replace the burst or leaky pipes without having to tear up entire swaths of lawn, which used to be the only solution available. Consider trenchless repair for old pipes, with the right plumber fixing a broken sewer line you’ll save yourself a huge headache and a huge mess in your yard.
4. Identify the big ticket items inside as well
Revamping the house will be a major undertaking, no matter how much work has to go into it. However, there is a significant difference in a home that requires a new kitchen and flooring throughout the entire interior space and one that simply needs a few modern updates. Get a handle on the larger projects that will need to be completed in order to evaluate the validity of the purchase itself.
5. Do as much of the work as you can yourself
Undertaking a home renovation can be a difficult process, but tackling the projects yourself is the only way to learn how to complete a fix-up that you can take pride in. Engaging in some of the remodel on your own also cuts down on the cost of outside contractors, which ultimately will cut into your profit margins if you are hoping to resell the property for a financial gain.
Learning to fix up a home is incredibly rewarding and will pay off as you continue your journey as a homeowner.
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