ARE PROPERTY REHABS THE BEST WAY FORWARD ?
Over the last 12 months we have seen a dramatic increase in demand for “rehabbed” or “Turnkey” properties, this is not just unique to Global Investments but seems to be a general trend with US real estate properties.
One may ask why is this happening now and would it not be better to buy a tenanted property without all of this extra hassle ?
The reasoning behind this trend is because some investors are seeing the added benefits of buying a refurbished property as compared to an older tenanted property.
The first big advantage is your yearly maintenance bills, with refurbished and updated properties you tend to have lower yearly maintenance bills due to the fact that most things items are upgraded or replacing, you tens to find new plumbing and electrics and well as updated kitchens and bathrooms, with some refurbished properties they even go as far as replacing the roof. With non refurbished properties we generally see that some things will need to be fixed or replaced due to general wear and tear.
Another reason is that you tend to find that refurbished properties offer better value for money and are generally available in the better parts of the cities. Buying a refurbished property gives you the opportunity to buy a run down property have it refurbished and therefor add value to the property. Looking at some of our recent refurbishment’s we can see that houses in the same areas that have already been refurbished are generally 20-30% higher in price.
A rehabbed home, by definition, makes the home move-in ready. This immediate usability makes it attractive to investors, having real estate ready to go means you can start earning income instantly and get your new tenants placed.
Once the property is ready your management company can then start the process of placing your tenants which can be either private tenants or Section 8 tenants given your preference.
Again people may ask surely it makes sense to buy properties with tenants already in place, well not really, with a vacant property you are starting with a clean slate and not inheriting tenants. The management companies will screen your tenants make sure they are fully vetted and take a security deposit from them, you are therefore confident that you are getting good tenants placed.
Management companies love receiving refurbished properties as they know tenants are constantly looking for these, especially in the good areas, what tenant would not prefer new carpets and paint and updated bathrooms and kitchens.
Buying refurbished properties can help you transform your property portfolio and opens up different avenues as an investor. Maximising a property’s capital and rental value is clearly a key motivator for investors, but the most important factor is ensuring that the property is in good shape for tenants and have your tenants placed as quickly as possible.
With a refurbished property you also have the option of putting your own stamp on the property, maybe choose the colour of the kitchen cabinets or decide on the colour of the paint, some investors love this part of the process or you could just leave it to the contractor.
Every refurbished property we offer for sale will have a full inspection report carried out once the contractor has completed their work, a sang list will be drafted and each item will be fixed before you close on the property, you will also receive pictures and videos throughout the whole process.
As a company we use some of the best building contractors in the US who have competed on 100’s of properties, we have a solid team both in house and on site and always deliver on time.
Here is an example of a large property in Cleveland that has recently been refurbished by one of our contractors, tenants are now in place and the property is under management by a great company.
If you would like more information on any of our new refurbishment properties please email email@example.com.