If you’re an investor looking for a quick fix, look no further. Fixer-uppers are properties that need some TLC and time before they can be rented out or sold at a profit. In this article, Better Homes & Properties shares the risks involved with being a landlord, as well as how to decide whether it’s best to keep your property long-term or sell it for a quick profit.
Which Is Better – Buying and Holding or Selling Your Fixer-Upper?
As an investor, you have two options when buying a fixer-upper – getting in and out quickly or holding on to the property. It’s wise that you consider your reasons for purchasing real estate in the first place before making this decision. If your goal is to be a landlord, then there are many considerations to make during and after your flip. The same goes for a quick sale.
● A quicker sale at top dollar when you work with Better Homes & Properties
● Ability to deploy capital elsewhere
● Less stress
● High taxes
● No monthly revenue
● Must manage showings
● Must deal with seasonal market changes
Holding Your Property
● Potential income replacement
● Better tax advantages
● Multiple revenue stream possibilities
● Can be stressful
● Tenants can be difficult to deal with
● Need to deal with cities for rental licensing
● May need to come out of pocket for additional expenses
What is a Landlord Actually Responsible for?
It’s crucial that you consider all possibilities as a landlord to make sure you have the time and money to endure. Landlords will be responsible for major repairs, known as capital expenditures. They are also responsible for many minor repairs. Every property is different, so you need to make sure you budget for these repairs every month.
You also need to budget for CAPEX, even if your property doesn’t need it at the time. This will ensure you aren’t stuck with a huge bill at one time. If you don’t have the time to be a full-time landlord, property management companies can help screen tenants, collect rent, and arrange for repairs and maintenance, at a price of course.
Follow these helpful hints to make your property better suited for renters:
1. Air conditioning – Tenants love to see central air if possible
2. New paint – Inexpensive and makes a huge difference in the feel of your unit
3. Updated appliances – Again, inexpensive and make a massive difference when viewed by prospective tenants
4. Storage – Storage is a key feature whether single-family home or apartments
5. Curb appeal – This is that crucial first impression that possible tenants will look for, so put some effort into landscaping and offering a beautiful and safe outdoor space. Consider installing added fencing – at around $4,500, it’s a great investment for the added security that it offers. You can easily find local fence companies online to do the job, but make sure to take the time to compare estimates from several, as well as get recommendations from past clients.
Advanced Revenue Opportunities
Here are some more advanced strategies for the aspiring landlord:
1. Cash-out refinance – You can pull money out of your property by doing a cash-out refinance. This will help maximize your ROI. Just make sure you analyze the cash flow.
2. Daily rentals – Daily rentals, which also include weekly rentals, are more popular now than ever. With sites like VRBO and Airbnb, you make the most of your rental property. Be aware this method will require a more hands-on approach.
All in All
Whether you’re looking to make a quick buck or generate monthly income, there are many considerations for both renters and property owners. As an investor, you should consider your reasons for purchasing real estate in the first place before making this decision. If your goal is to be a landlord, then there are many considerations to make during and after your flip. The same goes for a sale. If you decide on the latter, reach out to Better Homes & Properties to get your property sold quickly ! 425-213-3700
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