There are still great buys on Elk Grove Investment Properties in Elk Grove.
Many of our clients are picking up some great deals!
Many investment properties that pencil out for cash flow need some work. I find new investors sometimes get caught up in the project, and frankly over-remodel the home or multi-family property.
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Here are a couple things to think about if you are buying your first investment property in Elk Grove or the Sacramento area:
Rule#1: You don't have to live there!
Of course, you have to make sure your unit is up to par and must meet minimum heath and safety standards. I am not telling you to be a slum-lord. AND.. Remind yourself..You don't have to live there.
This is a fine line you must walk if you are going to be a successful landlord. This is a big challenge that many new investors struggle with. They pick top of the line materials to work with because it looks good as a finished product, yet they may not think through the decision from the perspective of long term wear and tear.
I had one client who insisted of putting laminate floors in the bathroom. This type of flooring and water do not get along. If you do not keep it perfectly dry, the floor will buckle and warp. Guess what the client found when their unit turned over and the tenant moved out? The warped floors next to the shower are really not the tenants fault in my opinion. Now they have to be completely removed and replaced with a more appropriate flooring for a bathroom. Had the correct flooring been installed in the first place, this would not be an additional expense to the landlord.
Rule #2: Watch your numbers - Have a Budget.
This is a must! Anytime you are doing a rehab project, you must have a budget before you start. That way it will help you curve the temptation to upgrade when you get to Home Depot.
Rule#3: Work with what you got!
Every home or rental unit has a charm, though some take more effort to find! Look for the attributes of the unit and accentuate them. An example would be to paint built-in book shelves bright white along with the trim to make them stand-out.
Rule#4: It does not have to cost big money to get the same effect!
Paint-paint-paint! This is the cheapest thing you can do that will give you a big payoff! I recommend watching HGTV or search the internet for quick fix up ideas on a budget. You would be surprised what ideas you could translate to your own project.
Rule#5: You do not have to make everything perfect!
When creating your budget, you will want to walk-through the property and write down everything that you must fix now. On a separate list, add any items you would like to update someday.
Be prepared, the have-to fixes could take a large part of your budget. Once you have priced the have-to's, you will know how much of your budget can be applied to the "someday" list.
Remind yourself, you most likely will not be able to take care of every item on the list. Ask yourself, what can I do with remaining dollars to get the biggest impact.
Let me give you an example of something that would appear on the someday list...
Everything is fully functional in the master bathroom. The tile work is outdated, but the grout and facets is in good condition. Updating the tile is probably not worth replacing at this point. The cost to rip into the tile and replace it would outweigh the additional potential rent you could collect. Try painting the cabinets, adding new handle pulls, and purchasing a nice shower curtain could do wonders!
I hope these 5 guidelines help you in some way for your next Elk Grove Investment Property rehab! If you would like help to purchase an investment property in Elk Grove, give me a call I am here to help!
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