Buying a rental property is one thing, but investing in the property after purchasing it is another. All too often, first time investors make the mistake of investing in a “fixer-upper” or “as-is” as a means for saving money, yet they fail to invest the money necessary to get the property functioning properly.
Sure, you can find a naïve tenant to move into what appears to be an aesthetically appealing home, but should injuries or further property damage ensue, you’re looking at a law suit or extremely high repair costs before you ever make a cent from your investment property.
Pay for a Complete Property Inspection
Just as a home buyer would schedule a home inspection to uncover the issues going on within their home, so should an investor. It is ideal to understand exactly how much it is going to cost you to get the investment property up and running. Not to mention, as a new landlord, it is going to be important for you to pass all local building codes and ordinances to avoid being fined by the government. Upon completion of the home inspection you should be provided with a detailed list of what needs to be completed. Areas that should not be overlooked include:
- Roof repairs
While you may not like to think about the cost of repairing a damaged roof, getting a better understanding of how the roof works might help. Of course you’re aware that the roof is designed to protect the interior of the home from various elements of weather. However, were you aware that the roof is also responsible for a great deal of the insulation throughout the home and also for protecting the home’s foundation and exterior building materials? All it takes is one serious storm with a bad roof and you could be looking at thousands of dollars in repairs.
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The plumbing system is an essential part of any home. Without properly working plumbing, tenants are unable to complete the simplest things from washing dishes to taking a shower. So if the inspector found a clog in the bathroom, you’ll want to have a plumber come out for servicing right away. Why not use store brought plumbing solutions? Well, if it doesn’t resolve the full problem, you could be looking at whole house clogs, sewage problems, and more.
In order for your investment property to stand as beautifully as it does, it requires a fully operational foundation. If a home inspector reports there are foundation cracks or other issues that need to be repaired, you should act fast. Foundation repairs can start off very miniscule, but end up very major. If you weren’t aware, a sinking foundation can affect the windows, doors, walls, floors, and roof of your property.
Quick Tip: Foundation issues should not be a DIY project. Helitech Waterproofing & Foundation Repair offers advice on foundation repair in their blog, which recommends that homeowners always keep a positive grade away from your home’s structure to allow for sufficient water run-off.
Electricity is certainly not to be played with as it can be detrimental to your rental property and dangerous (even life threatening) to your tenants. Unresolved electrical issues can lead to house fires, power surges, damaged property, and more. Something as simple as a short circuit or overworked electrical panel could eventually spark a fire without a moment’s notice. Try explaining to your insurance company that you were going to get to those repairs once you got the money…. Chances are it won’t go over well.
As a real estate investor and potential landlord, it is ideal that you take repairs seriously. What may start off as a hundred dollar repair could easily turn into a thousand dollar repair in an instance. Not to mention, staying on top of things and making the necessary repairs in a timely manner can really do wonders for increasing the overall value of your property … which in turn, means more money in your pocket.