Assessing Potential: How to Spot a Good Fixer-Upper Investment
You can make money by reselling old real estate after renovation. Some transactions with cash home buyers can bring up to 60% profitability, while others may not take place at all, and then the money will be stuck in real estate. This looks like buying a house in very poor condition, then renovating it and reselling it at a premium. The main thing is that the entire process, from purchase to sale, goes very quickly.
Fixer-Upper is only available on resale homes. To make money on resale, you need to buy at a significant discount. However, the price below the market average for comparable houses is only one of the selection criteria. It is worth paying attention to:
- Location. A house in a populated area with established infrastructure and a house in a former industrial area with many empty factory areas have different prospects. You need to sell your house as quickly as possible, so you can’t count on changes in the prestige and convenience of the location.
- Transport accessibility. Apartments in buildings located no more than 20 minutes walk from a metro station, ground public transport, etc. sell well.
- Infrastructure facilities. Universities, business centers, medical and shopping centers, sports complexes, parks, and specialized schools increase the attractiveness of housing and increase the audience of buyers.
- View. Greenery, river, panoramic views are in great demand. Houses with windows facing a noisy street or highway may be of interest if there is something nearby that the future resident needs. But other things being equal, such objects are purchased less willingly.
Evaluation of the Profit
The renovation budget is usually limited by the investor's strategy, which involves calculating profit. If you deviate from the plan, your income will be lower at best.
Typically, investors use the following calculation formula: the maximum purchase price should not be higher than 70% of the price after repairs (from which its cost is subtracted). "Freshly renovated" does not mean attractive to the buyer. The house should look modern and cozy. Therefore, it is necessary to be aware of interior trends - not only colors but also finishing and furniture.
If you decide to urgently sell your house, take advantage of the real estate purchase services offered by Christian Home Buyers on mutually beneficial terms. Urgent real estate purchase will allow you:
- not to tire yourself out searching for potential buyers;
- to minimize time costs;
- not to lower the price to sell your home faster;
- to receive money without delay;
- to avoid additional fees;
- not to worry about the legal purity of the transaction.