How to Cut the Cost of Repairs and Renovations on your Real Estate Investment
If you have several houses that you need to renovate before you can sell them, the costs can really mount up.
That’s why it is critically important to spend as little as you can on repairs and renovations. Here are some strategies that help you cut costs without cutting corners on high-quality work.
- Point to the future as you negotiate with contractors. Stress that you are a real estate investor who has – or who will have – a growing number of properties that will need work. Explain that the contractor can work on those other properties too, if he or she offers attractive cost estimates now.
- Get estimates from several contractors. You can then select the lowest bid, of course. But you can also use the estimates to get several contractors to compete for your business. Competitive bidding almost always results in cost savings.
- Ask contractors how you can save money. We recently talked with an investor who needed new walks installed in front of two investment properties. He asked a mason, “how can I get this job done for less?” and the mason suggested that he could install slate pavers that he had just removed from another property. The result? Beautiful slate walkways at a bargain price.
- Borrow wisely to pay for renovations. Pay with money from a tax-deductible home refinance or home equity line of credit. Remember that paying for renovations with a credit card is not a good idea because the interest you pay on the loan cannot be deducted from your taxes.
Should You Do the Work Yourself?
If you were a contractor before you began investing in real estate properties you can (and probably should) cut costs by doing your own renovation work on properties you own. But if you are a do-it-yourselfer, avoid the temptation to save dollars by doing your own repairs. The result can be properties that are full of amateur-level work that buyers and renters will notice.
Get your Real Estate Salesperson license
Consider Setting Up Self-Storage Facilities on Land that You Own
Before Buying Properties Check Out Local Employment Trends
Train to be a Property Manager
Personal Real Estate Coaching
How to Hire a Great Property Manager