Property Rehab
When buying property for rehablilitation, it is really important to do your house clean-up and repairs in proper order.
You don’t want to get ahead of yourself or waste time and money having to do things twice.
Approach the rehab process systematically and do not frustrated if everything does not go according to your plans.
Once you have purchased your home be sure to file an “Notice of Intent to Sell “.
Preparing to Rehab the Property
Property Rehab 101: Audio Part 1
Property Rehab 101: Audio Part 2
Inspect the property. Before you begin to rehab, thoroughly inspect the property. Note which items are in good condition and which areas need some work. It is helpful to have a professional inspector walk through with you as he or she will be able to identify things that you may miss. You can find a qualified inspector through the American Society of Home Inspectors.
- The home inspection should include the heating system, air conditioner system, interior plumbing, electrical system, the roof, the attic, any visible insulation, walls, ceiling, flowing, windows, doors, foundation, and the basement.
- If you are not a contractor, you should not conduct the inspection alone.
- Take pictures of everything during the inspection.
- The cost of an inspection varies by the size of the property, geographical location, and the cost of the property.
Develop a checklist. Once you are aware of the areas that need work, create a rehab checklist. A checklist will help you stay on track and not miss any repairs. Include both interior (walls, paint, etc.) and exterior items (e.g. landscaping, gutters, outside lighting).
- The checklist should be very detailed and describe everything that needs to be done to the property.
- The inspection report can be used to generate the checklist.
Create a budget. Go through your checklist and decide how much each repair will cost. An Excel spreadsheet is a great tool to use for your budget. The budget should be itemized for each individual repair. If the cost of your repairs exceeds your budget, you will need to make some changes to your checklist.#*Budget for unanticipated problems. These are bound to happen. New issues may arise once you begin the rehab process.
- If you plan to sell the property once rehabbing is finished, consider how much you will be able to sell the property for once it is finished.
Work with a contractor. Having a good contractor will make the rehab process much easier. Take your time when you are searching for a potential contractor. Contractors can be found through referrals, your local building department, real estate investments associations, and general job boards. Pre-screen any potential candidates to determine if he or she is a good fit for your project.
- Pre-screening questions should cover the contractor’s experience (at least 3 to 5 years), equipment (contractor should have own equipment) , employees (adequate support to complete the job), license (contractor should be licensed by the state<ref> , insurance (liability insurance and worker’s compensation), subcontractor use (determine if the contractor will be using subcontractors for the job), and referrals (at least 3 referrals).
- Each contractor that you are interested in should bid on the project, and then you choose the contractor that fits your budget and will do the best job.
- Have a walk through with the contractor. Once you have chosen a contractor, you may need to do another walk through of the property. Your contractor can also help you make adjustments to your budget and checklist.
- Set a timeline for completion once you have everything in place with the contractor. This will keep all involved parties accountable and on the same page.
Get any necessary permits. Permits are required for rehabbing a property. Having all the necessary permits will insure that you are not in violation of any local building codes. Contact your local building department to determine what you need. This will vary based on the type of work that you will be doing.
- Typical renovations that require a permit include installing new electrical wiring, increasing the square footage of the property, installing a fence over 6 feet tall, and anything that involves a public sewer line.
- Tasks such as installing a roof, installing flooring, painting, and replacing windows and doors usually will not require a permit.
- If you are working with a contractor, he or she can help you with the permits.
Working on the Property
- Begin with demolition and trash removal. Remove any trash from the inside and outside the property. This includes removing any items that are damaged or that you will be replacing (e.g. flooring, cabinets, appliances, light fixtures, toilets, water heaters, etc.) Outside trash may include trimming any dead trees and bushes, garage doors, fencing, sheds, decks, and siding.
- Address any roofing or foundation issues. If the property needs new roofing, this should be done before you begin working on any of the interior repairs. You do not want any water leaking into the property. Slab foundation and block and beam foundation repairs must be made at this time as well.
- Fixing these exterior issues first will draw less attention to the property while it is being rehabbed.
- Install new doors, windows, and trim. Exterior doors and windows should be addressed once the foundation is finished. This will protect your property from weather and from critters and animals getting into the home. The windows and doors will also make the property look less like a construction site.
- Count the number of doors and windows you will need and take measurements before you go to the store to purchase the items.
- New entry doors are a nice way to change the look of a property and add value.
- Work on the plumbing and heating and air conditioning system (HVAC). Plumbing repairs may include water heaters, tubs and showers, toilets, and water/gas lines. You may need a new HVAC system or repairs to the existing one. The electrical system can be worked on during this time as well.
- Be careful if installing an outdoor air conditioning unit before someone is occupying the property full time. You do not want it to get stolen.
- Hang and and finish the sheet rock. You can either install new sheet rock or repair the existing sheet rock. It is cheaper to repair existing sheet rock. Once you are finished with the sheet rock, you can work on the wall and ceiling texture.
- Paint the ceiling and walls. Protect the floor with plastic or canvas and use painter’s masking tape to protect the areas that you do not want to get paint on, and caulk the trim and baseboards before you start painting. Use a primer on the walls before applying the paint.
- Walls should be cleaned before you start painting. Sand and clean the wall again after the primer is applied.
- Paint the walls using a V or W shaped stroke and avoid using a straight up and down motion.
- Put in light fixtures, appliances and flooring. Install appliances such as ovens, dishwashers, washer and dryers, etc. New light fixtures should be installed as well. Lighting is a great way to change the look of a property and is relatively inexpensive compared to other repairs. Flooring may include tile, hardwood, carpet, linoleum, or laminate.
- The flooring is installed later in the rehab processing to avoid getting paint on the floor and to avoid damage from people going in and out of the house. You want your floors to look fresh when you are finished with the property.
- Consider installing the appliances and light fixtures before the flooring. You would not want to damage the new flooring when these items are being installed.
- Add the finishing touches. Once everything is done, go through and examine all of the work that has been done. You may need to touch up some painting, or do some last minute tweaks to the plumbing, HVAC, or electrical system. You should also thoroughly clean the property.
- A final inspection is a good idea as well.
- Landscape the property. Begin working on the front of the property because this is what people will see first. Fences, patios, decks, sidewalks, porches, and driveways should be taken care of first. Once those items are finished, add soil for planting flowers, bushes, etc. The backyard should be addressed last.
- Examine how much sun your property gets before you buy plants. If there are many trees on the property, get plants that do not require a lot of sunlight.
- Speak to someone at a garden center about your ideas and ask for suggestions about the type of plants that will work best for your property.
- Consider how much time your landscaping will require. If you do not have a lot of time to devote to the yard, look for low maintenance options.
- If your windows are low, plant low growing shrubs and trees and ground cover instead of taller plants. You do not want to cover the property.
Rehab Tips:
- Home Depot, Lowes, Menard’s are convenient and well stocked with items for your property
- Craigslist can be a great resource for supplies
- Be Patient. Property rehabbing often goes over budget or does not stay within the original timeframes.
- Do the repairs correctly. Trying to hide issues with poor work will bite you in the end.
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