Being able to quickly and accurately estimate a rehab is one of the skills every real estate investor should have. When a potential deal comes along, you have to be able to move quickly with your analysis because someone else is often right on your tail.
The ultimate trick is to be quick but accurate. This may seem a no-brainer but often times the emotion or thrill of the buy will overcome your sense of logic. One way to minimize your risks is to create a checklist of items that need to be included on your inspection check. A simple checklist can save you time and money.
I have two go-to lists of items that need checking broken up between interior and exterior. This article will focus in on the interior of the home. It will contain each item plus a spot for cost and comments. These cost and comments do not need to be exactly right but an estimate of what repairs could be needed from a visual inspection. You can create a more detailed list later when you have more time to inspect the property or get a professional bid.
One of the most overlooked major systems and contain many different components. Focus in on the electric panel. Check to ensure it can handle a modern load of use from today's technology. Is the breaker outdated and old?
Examine the outlets to ensure GFCI compliance. Also, check if two holes or three holes. Two holes mean there is no ground wire which can be a problem when reselling. These are simple fixes that will not take your whole rehab. The most of which could be a new breaker panel otherwise all these repairs can be done under $1000.
First and foremost ensure the copper has not been stolen and you have a functional system. Try all faucets and fixtures. Check and flush toilets, look for leaks. Listen when water is running and after for drips or splashes which indicates leaks.
The most normal expense in the plumbing system is usually the water heater. If it is older than 10 years you are most likely needing to replace it. Check to see if it is vented properly.
One of the most clear indicators of a leak or an issue is mold or rotten wood. Those could be potential money suckers. Avoid mold at all costs unless you get a professional bid before purchase. Learn the extent of such before assuming its a small fix.
Most units today will last around 15 years if older be cautious and get inspected before purchasing. Check all air ducts to see if air is coming out. Is it hot or cold? Find cool or hot rooms in the house or incosistencies These could be signs of ductwork issues or damage unit.
Does it need a complete redesign? The kitchen is the single most factor to attract great buyers and tenants. How is the lighting? Well-lighted, clean, and sleek look will attract tenants and buyers. Don't go overboard but a few small changes can make a huge difference. Focus in on cabinets and lighting. You do not need to replace cabinets but look to see if painting them is a good option. Add good practical lighting fixtures and replace outdated ones.
Stainless steel? Are all the same color? It is always a great selling technique to have new appliances when selling a home but for rentals, you can get away with older appliances and still attract great tenants.
Colors matter here. Make sure they are clean based colors. Check to ensure fixtures are not outdated. Is there a medicine cabinet? If not that is an easy upgrade and selling point. Lighting is again important here. A simple swap of brighter bulbs can make a difference.
Look for holes and proper trim work. Small holes are easily patched but avoid holes bigger than a golf ball. Stay away from bigger holes indoors as those can sometimes be costly.
Always look under the carpet! Hardwood and even concrete floors can be refinished and a cheaper alternative than replacing the carpet. Tile can be a great upgrade for Kitchen and bathrooms. If there is a lot of floor space your flooring choice can make a big difference.
Ensure exterior doors have separate bolt locks. Check keys to ensure same is used throughout exterior doors including door to garage. Are the doorknobs consistent and working? lAlso. ensure the locks are working on windows. Lack of ecurity can be a huge deterrremt for buyers.
Ceiling fans can add to a rooms ambiance and attractiveness. They are low-cost mprovements that make a big impact. Make the home as bright as possible and replace old outdated styles.
Take a good tour of the basement and pay attention to the smell. Mold can be big issues in basements. Look for evidence of flooding or other water issues. Also, check for termites.
Take a look at HVAC equipment and also insulation. Poor insulation can wreak havoc on your bills. Check to ensure wiring is in compliance as a likely spot for fire is from faulty wiring in the attic.
Look for anything unique or odd. Add in any other elements you think could be pricey
Quick estimates can be a great skill to master. Good deals come and go quickly. Great deals happen in a flash. You need to be able to handle a quick and accurate estimate to ensure you stay in the game. Hopefully, this checklist will help you neglect your risk for rental investment.