Rent or Sell Your Remodeled Fixer-Upper?
There are about 48.5 million rental units throughout the nation. Of these, approximately 22.7 million of them are owned by individual investors. If you've decided to take the leap into real estate investment, you're far from alone.
If you've recently bought a fixer-upper, it can be difficult deciding what to do with the property once you've remodeled it. Should you become a landlord and rent the home? Or should you sell the house and hope to receive a profit? While there's no clear answer that applies to every situation, Masiv Real Estate presents you with some considerations that can help you decide.
Historical Remodeling Considerations
Not every remodeling project increases your investment property's value. For example, historical homes have major selling points that should be left alone. Original fixtures and finishes are part of a historic home's appeal for many buyers. Remodeling these could detract from the home's value. Plus, if your fixer-upper is listed on the National Register of Historic Places, there may be some changes you're not allowed to make. Do your research first.
Consider a Vacation Rental
Turning your investment property into a vacation rental may be worthwhile, depending on your location. For example, if your property is in San Diego vacation rentals can go for around $200+ a night. You can also create a profitable vacation rental if you're close to a popular destination like the Poconos. Many people rent their properties for premium prices during peak seasons and then at a steep discount during the off-season.
Upgrades if You Plan to Rent
Some upgrades will make the home more desirable to potential renters. These upgrades can also allow you to charge slightly more per month (in some cases), so you end up with a higher return on investment. For example, expanding or constructing a porch is always a good idea if your property has enough outdoor space. Adding a shed can also improve the property's attractiveness.
Another option is to surround your property with a fence. Before hiring a fencing contractor, be sure to read online reviews. You'll also want to verify the contractor you use is licensed, insured, and aware of any underground utility lines. The average fencing project costs around $2,800 but can vary significantly based on your location and the project's scope.
Research the Renting and Selling Markets
The most significant considerations on whether renting or selling your remodeled fixer-upper is best are location and the current market. Research the going rental rates and recent sell prices on nearby homes similar to you. If rent prices are generally low but homes are selling high, you may want to sell. Or, the opposite may be true.
If the market is in your favor, you may decide to purchase and rent out more than just your current property, especially if you live in a desirable travel destination. In this case, look into starting an LLC and creating a memorable logo that will provide consistency between your rental properties. You can make custom logos online for free to get your business - and your marketing program - started.
Rent or Sell Your Remodeled Fixer-Upper? There's No Clear Answer
There's no clear general answer on whether renting or selling your remodeled fixer-upper is the best option. The answer to this question has to be made on an individual basis, with several factors taken into consideration. However, the information above should help you make that decision for yourself.
Let the professionals at Masiv Real Estate help you purchase your next investment property. We know the San Diego Real Estate market and can lead you towards the best investment decisions. Contact us at (619) 878-3817 or fill out the below contact form and our knowledgeable team will reach out immediately.
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