Rehab is a great area of real estate investing, but where do you start. There are a few things you need to know about investing in rehab real estate before you can put your money into it.
The Basics of Rehab Real Estate
Rehab real estate falls into three different categories, which are:
- Personal Use
Each category has its own pros and cons. However, if it is your first time, it would be wise to start by rehabbing a house for personal use. This ensures you keep risks to a minimum and you won’t have to worry about carrying added costs from another property. By living in the house while you rehab it, you will incur regular living expenses. Also, there are several other advantages of living in the house you are rehabbing. For starters, you don’t have to worry about meeting time restrictions. But if you rehab a property and wish to flip it, the value goes down with each passing day the property is not sold.
Additional Factors to Keep in Mind
- Learn From Your Mistakes
No matter how well prepared you are, as a first time rehab real estate investor, you are bound to make mistakes. Try to learn from the missteps and your chances of success in the future will increase.
- Keep the Buyer in Mind
If you are rehabbing a house with the intention to flip it, think from a buyer’s perspective. Consider making choices that will appeal to potential buyers to ensure a quick sale.
On the surface, rehabbing real estate may seem complicated but as you can see, the process is quite simple.