BUSINESS FUNDAMENTALS
RENOVATION METHODS
scale popular features? It depends on the neighborhood and what the buyers expect. Rather than only focusing on budget when making these decisions, always consider buyers’ preferences. House renova- tions that are based solely on a bud- get can become costly if the house doesn’t sell at the right time. It may take a granite countertop, for ex- ample, to catch the eye of the right buyer in your geographic market. If you’re selling to an investor, verify their funding source before you sign a contract. First, have it cleaned by a pro- fessional. Clean sells. Clean both inside and outside the windows as well as the windowsills so pros- pects will get a great view rather than being distracted by bugs and dust! Clean out the closets and other storage spaces. Most people want storage space, so make yours look as spacious as possible. Be sure all pet hair and pet odors are gone. (Prospects can smell some- one else’s pet when they walk in the door.) Feature the uniqueness of the house. What makes it stand out from the rest? You may want to add your personal style to distinguish it from all the neutral houses they have seen, but beware of flashy paint color. I tried to sell a house that featured burgundy walls sever- al years ago and had no takers until I painted the walls a more popular color. Lesson learned! A little staging in the living space, kitchen/dining, and master bedroom can go a long way toward helping your potential buyers visualize what it could be like to live in the house. A simple, affordable example is to use attractive bedding. It doesn’t have to be expensive; you may want to purchase a used bedspread, for #3 SHOW YOUR DISTINGUISHING STYLE ON THE INSIDE
example. Be sure everything looks tidy. No clutter!
queen!
Check comps in the area so you can buy and sell at a competi- tive price. Comps also may provide insight into whether rehab- bing or prehabbing makes more sense. If you are rehab- bing, you’ll need to position the house as the best move-in ready option avail- able. Prehabs must be positioned as the best deal on the mar- ket for someone who doesn’t mind doing a little remodeling to make the house their own at the best price. This strategy opens the market to real estate investors. Position with pro- fessional pictures! Cell phone cameras simply won’t do your masterpiece justice. Mention renovation loans in your advertis- ing if you are prehab- bing. The projected
#5 MAKE THE OUTSIDE ATTRACTIVE Make a good first impression with curb appeal. Follow a landscape plan even if it is a simple one. For example, incorporate a flower bed or a few well-designed flowerpots, remove all the weeds, and maintain the lawn. Trim trees if they are ob- viously overgrown. Place trash and recycle bins out of site. The bottom line is that you want the property to look attractive and clean. #5 DOUBLE CHECK THE DETAILS Be very choosy about your con- tractors and pay them well if you wish to build relationships for future real estate projects. Only accept quality work, regardless of whether you are doing a rehab or prehab. Double check ALL the work. It’s not about trust; it’s about your in- vestment. You have the final respon- sibility for quality control. There’s more than one way to fix and flip a home. You can choose to completely rehab the house or prehab by repairing only the most essential areas and sprucing it up. Either way, you must carefully choose your target market and use strategies to attract buyers to your property, so everyone wins! •
Rehab vs. Prehab WHICH RENOVATION METHOD IS BEST FOR RETAIL SALE?
renovation costs can be factored into the overall loan amount if the prospect qualifies. This can help prospective buyers understand their options more clearly. Create a resale marketing strat- egy that fits your style. A Realtor® likely will encourage you to adver- tise or show the property only after it is 100 percent complete. Waiting can cut into your profits, however. Every investor wants real estate to sell fast, so begin the marketing process on the first day the property is acquired, especially when the tar- get buyers want to complete some of the renovation themselves. Should you incorporate a few up-
by Gaylene Rogers Lonergan
Gaylene Rogers Lonergan is a Board Certified Commercial and Residential Real Estate Attorney. Reach her at 214- 503-7509 or Escrow2@lonerganlaw.com
D
o you want to put in all the work required to totally
outside are essential to any renova- tion project, but several other factors must be considered when marketing a rehab or prehab property. #1 IDENTIFY YOUR TARGET MARKET If you are rehabbing, you are probably targeting the traditional home buyer or investor who wants
to buy and rent. Depending on the price, you might specifically target deal hunters. For a prehab, you could have three markets: deal hunters, flip- pers, and remodelers. #2 CREATE YOUR MARKETING STRATEGY FOR RESALE Price is king and positioning is
renovate a house to resell or would you like to repair only the essentials and make a few cosmetic changes? Whether you choose to rehab or pre- hab, there’s money to be made when you market your property right. Fixing critical problems inside and making the property attractive on the
© Gaylene Rogers Lonergan and Lonergan Law Firm, PLLC, 2017-18. All rights reserved. This article is provided for educational reasons exclusively and is not meant to be construed as legal advice. The Lonergan Law Firm, PLLC, will represent you only after being retained and that agreement is made in writing.
30 | think realty housing news report :: august / september 2019
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