The Real Estate Investor's Guide to Rehab Costs

Many real estate investors choose to purchase properties which are in need of some repair. Some take on the repairs themselves, while others sell the home with a discount to someone else who will happily deal with the repairs themselves. Whichever option you choose, it is imperative to know how to figure out what the repair costs involved in a property will be, before you ever agree to a purchase price. nnWhen you are walking through a property you are considering for purchase, you should always do so with a pad of paper and a pencil handy. Start at the outside of the home and walk around the grounds. Make note of the roof, gutters, exterior paint, windows, garage door, etc… To help yourself remember later, when you are not at the property, make notes on each item and whether they are in good shape or need some work. If work is needed write down exactly what you believe is necessary.nnOnce you enter the property start the dishwasher, washer, dryer, heater, A/C and any other systems in the home which will come with the property. Let these items run a bit while you look in other areas of the home, and make notes on them as well.nnAt each sink in the kitchen, bathrooms, and garage, turn on both the hot and cold water. Check to make sure both hot and cold water come out and check beneath the sink to look for any possible leaks. Again, make notes for yourself which you can refer to later. nnWhen you walk through the other areas of the home such as living rooms and bedrooms, make sure to check for any flooring issues. Additionally, look at all of the interior and exterior doors in the home and check them for damage. Make notes of any flooring or door issues you see.nnOnce you have completed your walk-thru of the home, you now have a listing of all of the obvious material issues which may need to be addressed. From this list you can now determine the approximate costs of repairs and make a more informed decision on whether or not to purchase the property. nnnn