Once you’ve been in this business awhile, you’ll see the importance of understanding construction, renovation, and cost of improvements. Everything from your prospecting to your close of the deal will benefit from this knowledge.
The foundation of a successful real estate investment business is knowing what to buy in the first place. NOT knowing how to estimate improvements can cost you plenty. In fact, knowing what to look for before you buy is the second step. The first step is knowing how to choose which prospective properties you’ll add to your inspection list.
Every property you inspect takes time. When you know how to estimate the cost of improvements, you’ll be able to cross properties off your list when they don’t meet your specs.
What do you look for when considering an investment property? Having criteria to measure against will help you determine how far you’re willing to go with a property.
Real estate investors are in the business to help others. We deal with more than clients. We deal with lives.
Do you buy and sell as-is or do you invest in condemned properties, bring them up to code and flip? Knowing the cost of a new toilet or a new roof will help you calculate your ROI.
Once you determine that a property meets your personal investment guidelines you can bring in the team member who can estimate actual costs. The next step will be to price the property accordingly. No matter what, however, your best-case scenario will be to buy low and sell low. It’s all about freeing your capital for the next investment.
Knowing how to prepare a property for sale and having the expertise to make those improvements is the mark of a superior investor. Whether the house has a damaged roof, plumbing problems or is infested with termites, you are making a difference. Never lose site of the value this brings to your client, the seller.
By improving a property, you will not only be helping the seller, but you’ll also be helping the whole neighborhood. Making repairs or replacements increases the potential value of all surrounding properties.
Real estate investors are in the business to help others. We deal with more than clients. We deal with lives. That’s why it’s our responsibility to learn all we can and to always give our best to each and every person we work with.