Are you interested in rehabbing properties for profit? If so then this blog post will help you know what to do, what not to do, and will give you 4 reasons not to over do it on rehabs (because it will cost you a lot of money and headaches if you do)…
There are a lot of rehabbing shows on TV, and they can be pretty entertaining to watch. Unfortunately, too many people see rehabs as an easy and fun way to get rich quick, which rehabs are most definitely not! Yes, it is possible to make good money on rehabs but it’s also possible to overdo it and end up losing money. Here are 4 reasons not to over do it on rehabs.
4 Deadly Reasons Not To Over Do It On Rehabs
Reason #1. Your Budget Can Easily Go Out The Window
On a rehab, you set a budget of money and time – how much money you want to spend and how much time you plan to spend it in. Unfortunately, it’s very easy for that budget to go out the window and you may end up spending more money and more time than you intended.
This can happen for any number of reasons but it especially happens when you over do it because even simple additions to your plan can increase the money or time you need to spend.
Reason #2. People Will Change It Anyway
Buyers want a house they can move into right away. And some buyers might want a house that is done up really nicely, although most buyers are looking for something they can add their own personality to.
In fact, some buyers may even change the décor as soon as they move in, so your expensive and fancy paint job or cupboard doors might end up being covered over! Just stick with plain and neutral decoration to stay in budget. Even though this may not be exciting for you, remember, you are not living there. Someone else will be.
Reason #3. Money Is Only Made When You Sell
One of the most overlooked reasons for why you shouldn’t over do it in your rehab is because you only make money when you sell. The longer you are on the property working, the longer you delay your income.
You need to put together a straightforward plan, get in there, do the work, and then get the house sold ASAP. Overdoing it will only delay you.
It is also advisable to use the same products and/or colors for every house you are rehabbing. You know the cost and labor involved and you don’t have to waste time picking out what tile goes with what counters and cabinets. You already decided! Do it once, rinse and repeat with the same colors and materials.
Reason #4. You Are In The Rehab Business
You are in the rehab business, not the home decoration business. Your job is not to shock people with how beautiful the house is or how good your taste is in paint; rather, your job is to create a nice house that someone will want to pay you for. Period.
Create a system and materials your contracts are used to. They know what to expect and know what it should look like. They will get used to the process and this will allow them (and you) to run on more of an auto-pilot than reaching out to you daily with questions.
It’s easy to go overboard and do too much on rehabs but if you follow these 4 reasons not to over do it on rehabs then it should help you make more money and keep more of that money as profit.