You may be familiar with the term BRRRR property—a distressed property flipping strategy that comprises the steps Buy, Rehab, Rent, Refinance, Repeat. A question we often get is: which parts should be repaired during the rehabbing stage? There is only so much time and so many resources to make the needed repairs, so what fixes should be a priority and will offer the best results for the property investment? Here are some recommendations.
1. A fresh coat of paint. A simple paint job in lighter or neutral colors is an easy, cheap way to update the look of the property. You can utilize a professional painter or do the job on your own if you’re confident in your skills. Keep the colors simple so that they will appeal to most people, and do as many rooms as needed, especially rooms with chipped, dirty paint or rooms with intense or unappealing shades. If suitable, it may be a good idea to remove wallpaper, especially if it covers large, focal areas of the home.
2. Patch up drywall. Take a look during the day in natural light for drywall damage, including scratches, holes, or indentations. Most of these are minor cosmetic fixes that you can take care of with some spackling compound and paint for small holes and scratches. If there are larger holes or gashes, use a joint compound to smooth out the property’s walls and ceilings.
3. Make outdoor fixes. The property’s exterior will be the buyer’s first impression, so the outside of the house needs to look good. Clean up any junk that has accumulated in any sheds or the yard and fix fencing. Mow the lawn, take care of the weeds, and plant some flowers to add vibrance and color to the property. Roof fixes are costly, so it’ll be worth your while to take care of missing shingles, moss growth, or gutter issues. If a prospective buyer gets spooked by the prospect of a bad roof, you might lose them quickly.
4. Update the kitchen. There isn’t necessarily a need to do a complete kitchen renovation, but there are lots of changes you can do to make the kitchen more inviting and modern. You may want to install new fixtures, add new paint, and replace countertops. Buyers will expect appliances to work and be in functional shape, so it may be necessary to replace them to appeal if they’re not operating at full capacity.
5. HVAC. If you are wondering whether you’ll need to replace the HVAC system, then you may want to commision an energy assessment. That way, you can see if there are energy leaks or if there’s an issue with poor insulation that you can upgrade. However, if the heating and cooling system is old and needs an upgrade, it may be worth it to incentivize buyers and add value to the property.
6. Update the bathrooms. The bathrooms need to appear as bright and clean as possible. Everything should be functional, so if there’s an issue with a leaky faucet or running toilet, then these need to be repaired. Replace the toilet seat, replace missing tiles, and clean up spots that have accumulated dirt and mold. It may be appropriate to emphasize larger and more important bathrooms such as owner’s suite bathrooms over other smaller bathrooms.
7. Faulty plumbing. Plumbing problems can lead to larger water damage concerns including mold and dry rot, so it’s best to take care of any plumbing issues right away. Take care of minor repairs such as leaks around toilets and faucets, and replace damaged pipes. While some fixes can be taken care of inexpensively, such as replacing a toilet’s wax ring, bigger problems will require a licensed plumber.
8. Fix electrical concerns. Electrical problems can lead to electrical fires and other issues and are of huge concern. Making sure that the property’s electrical system is functional and safe runs the range from small, inexpensive fixes to expensive, major issues. Some small issues to look at are frayed wiring, missing wire nuts, and faulty outlets and light switches. A major issue to look at is to make sure that the circuit breaker meets the property’s amperage need. Unless you’re a pro, you’ll need a licensed electrician to take care of these fixes.
9. Make sure the small details function. Do a thorough look at the property and be certain that everything works as it ought to. These include smaller details like doorknobs, windows, locks, doors and garage doors. While not everything needs to be new, you want to be sure that everything is in good working order to get the best price. You don’t want things to break or not work when showing the property to a potential buyer. This can instantly erode trust.
If needed you can always invite an inspector to look over the property to be confident that it will pass inspection and be appealing to buyers. Rehabbing is expensive, so take care of any issues that may stop a sale from happening first before moving on to other fixes.
At High Return Real Estate, we offer straightforward ways for our clients to grow powerful streams of passive rental income through our strategic turnkey real estate investing. We have fully systemized practices for acquisition, rehabilitation, and management that allow us to have some of the highest returns in the real estate investing field today.