The approach used to fixing a house to live in is different than the approach used when fixing to sell or rent, and it should be. When you plan to live in a house for some time, you are more emotionally invested in the look, feel, and function of the home because obviously, you’ll be living there.
But when you’re buying a home to sell or to rent, you must be more business conscious. You’re making an investment with the aim of making profit. Spending too much in remodeling could cut into your profits big time, or worse, you could lose everything you invested and end up with debts instead. Here are things top things to consider when fixing to sell or rent versus fixing to live:
Top things to consider when fixing to sell or rent
How much money do you want to make from the house when you sell it? If renting, how much money do you plan to charge monthly for rent, and how much is your estimated yearly profit. This should be at the forefront of your decision making when it comes to remodeling the house
Neighborhood home value
If you’re fixing a house to sell, you need to be careful not to “over-improve” the house for the neighborhood. In other words, don’t spend more on the house and repairs than people are willing to pay to buy a house in the neighborhood. Do your research to avoid wasting money.
Ease of selling or renting
How fast do homes sell or rent in the area that you’re thinking of investing? It’s best to know beforehand so you are able to keep the property up until it’s rented or sold.
Top things to consider when fixing to live:
Length of time you plan to be there
A home purchase is a big expenditure, so don’t do it unless you’ve sat down to make a good plan of where you see yourself in the next 5, 10, 20 years and beyond. The house should fit in the plan.
Life changes and sometimes, you need to sell your house. Make sure when renovating the house, you think about the resell value you would get if you had to sell the house for any reason.
Here’s where HGTV comes in. Yes, aesthetics are important when fixing a house to live in. Have fun with making your new home yours, but saving where you can is a good idea.
Bottom line: you don’t need to fall in love with a house you’re fixing to sell or rent. Make it nice, but try to spend as little as possible to maximize your profits.