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HOUSE REHAB IS AN AMAZING REAL ESTATE INVESTMENT OPTION

Posted by Victor Kakendo on 18 May 2022
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House rehab helps improve the value of a real estate project. A Nairobi dweller knows the estates we refer to as old money. They are usually estates that were constructed a long time ago. By a long time ago it could mean in the 90s. They are characterized by being in a prime location but having old designs. New construction projects in Nairobi have shifted many city dwellers’ desires from these estates to more modern designs. To improve the value of an investment in real estate, consider house rehab.

As an estate agency, it is common to get clients who specify that they want us to get them a modern house. We understand. There are conveniences that come with the new houses that were unthought-of when the older houses were being constructed.

What then happens to the old houses? A house rehab of course.

What Is A House Rehab?

Rehabilitating a house refers to the process of purchasing a property, renovating and improving upon it, in order to sell it at full market value. This usually helps boost the property into a more impressive, or even excellent condition without drastically changing its floor plan. Before embarking on a real estate rehab, it’s important for investors first to understand such an undertaking’s nitty gritty.

Apply The 70% Rule

Before taking on a house rehab, you should be confident that it will generate some worthwhile return on investment. This can be done by using the 70% rule. This means that after taking into account the costs of the repairs, an investor should never pay more than 70% of the after-repair value of a house.

How to Rehab a House

  1. Engage a professional inspector to evaluate the house
  2. Create a checklist of everything that will need to be done from start to finish.
  3. Come up with a rehab budget once you know the scope of work.
  4. Find a reputable contractor to execute your vision.
  5. Obtain the necessary permits that are required for your project.
  6. Start with the cleanup and demolition phase which will allow for renovations to begin.
  7. Get started with exterior improvements that will give the property the pavement appeal it deserves.
  8. Make a priority the interior improvements by choosing repairs that offer the highest return on investment and add any improvements before considering the project a wrap.

For investors looking to get started, here are the steps of how to rehab a house on a budget:

  • Schedule a property inspection: This should top your to-do list. A professional inspector can help you create a list of exactly what needs to be repaired or fixed.
  • Create a budget:  This will most likely include the cost of materials, contingency allowance, and labour cost at the very least.
  • Interview contractors: Working with an experienced, quality contractor can be the difference between a good rehab and a great rehab. Choose wisely, of course with the help of your network.
  • Schedule a walkthrough: This is when you can point out the various projects you have identified as a result of your initial inspection. An experienced contractor should be able to help you modify your timeline, budget and checklist.
  • Obtain building permits as necessary: Make sure to apply for any building permits as necessary, to avoid getting stopped midway through your project.

A house rehab is one of the most lucrative ways to make huge money in real estate, without waiting for years to have the property appreciate. Even apartment buildings can be upgraded to fetch a higher income in the market.

Contact a trusted property management company to assist in locating such potentially high-income projects today.

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