When it comes to home remodeling, building or investing in houses there are a lot of remodeling to take into consideration. For the new guy, this can soon become an overwhelming process and you can easily lose a lot of money if you are not careful.
Here are some remodeling tips if you are wanting to profit from remodeling a house.
If you are into real estate investing then you more than likely have been thinking about the idea of buying and selling houses. I have been doing it for quite some time and here are some tips for remodeling your home.
- If you know nothing about construction then I HIGHLY recommend you hire a builder. A reputable contractor will meet you onsite and look at the subject property. You should be able to get some estimates of repair. Make sure he/she is licensed and insured. Get a copy of his builder’s license.
- When arranging your financing with a lender ask for an interest only loan for 1 year. Your payments will be lower. If for some reason it takes longer than a year to sell the house you can sign for another year. Make sure you confirm this with your bank. Check with your bank manager to see what they would be able to do and importantly for what cost if things don’t go according to plan.
- Make sure that you figure out all your costs in your loan. By doing this you will have financed the payments and be able to draw from the bank when a payment is due.
- When you have received the estimate from the contractor add about 20 to 40% to it. I am not suggesting that your contractor is trying to scam you. The fact is all budgets run over. So count on it up front so you are not surprised in the end.
- Call your insurance company get the premium amount and add those numbers into your loan. When the payment is due draw from the loan.
- Make sure you figure in utility expenses. Take into consideration the season and the type of utilities the property has. You may need to add more or less depending.
- Strongly evaluate the market in which you are investing. Do your homework and see what other properties are selling for. Too many times I see people get into this business, often they don’t figure all the costs and when budgets go over, try to sell for more than they can realistically hope for. Have all your numbers together and be realistic.
- Go to the job EVERYDAY or at least every other day. Whether you are doing the work or a builder, the project will go more smoothly, closer to budget and be completed on time. If you are using a builder this is imperative. He or she will need your opinion for remodelling daily.
- Always install new appliances.
- Pick out all of your colours out before you start. Write them all down and make sure your builder has a copy. This is crucial to getting the job done on time. If anything needs special ordered you will know it upfront. Not to mention if you have to be unavailable for some sort of emergency…everyone can still keep working.
- Allow a reasonable time frame. Take into consideration holidays and weather. Do not kid yourself. Be realistic.
I have had good remodeling and made profit and some bad ones. Every remodeling has had some surprises. However I find that most of my profits come from saving on materials. With my most recent one I saved thousands by shopping for tiles and vanities at TFO.