Inspect the property. Before you begin to rehab, thoroughly inspect the property. Note which items are in good condition and which areas need work. It's helpful to have a professional inspector walk through with you. He or she will be able to identify things that you may miss. In the U.S. you can find a qualified inspector through the American Society of Home Inspectors. Ask the inspector questions as you go through the property.
1
- The home inspection should include the heating system, air-conditioning or HVAC system, interior plumbing, electrical system, the roof, the attic, any visible insulation, walls, ceilings, flooring, windows, doors, foundation, sewer line, and the basement.
- If you are not a contractor, you should not conduct the inspection alone.
- Take pictures of everything during the inspection. Your inspector will typically take photos of problem areas for their records, but you should have documentation for your purposes, as well.
- The cost of an inspection depends on the size of the property.
- 2
- Develop a checklist. Once you identify areas that need work, create a rehab checklist. This will help you stay on track and not miss any repairs. Include both interior (walls, paint, etc.) and exterior items (e.g. landscaping, gutters, and outside lighting).[
- The checklist should be very detailed and describe everything that needs to be done to the property.
- The inspection report can be used to generate the checklist.
- 3
Create a budget. Go through your checklist and decide how much each repair will cost. An Excel spreadsheet is a great tool to use for your budget. The budget should be itemized for each individual repair. If the cost of your repairs exceeds your budget, you will need to make some changes to the checklist. - Budget for unanticipated problems. These are bound to happen. New issues may arise once you begin the rehab process.
- If you plan to sell the property once rehabbing is finished, consider how much you will be able to sell the property for.
- 4
Work with a contractor. Having a good contractor will make the rehab process much easier. Take your time when you are searching for a suitable contractor. Contractors can be found through referrals, your local building department, real estate investment associations, and general job boards. Pre-screen any candidate to determine if he or she is a good fit for your project. - Pre-screen questions should cover these considerations:
- A contractor's experience: you want at least three years
- Equipment: a contractor should have his/her own equipment
- Employees: you want to see adequate support to complete the job
- Licensing: a contractor should be licensed by state or other local jurisdiction
- Insurance: liability and worker's compensation
- Subcontractor use: determine whether the contractor will be using subcontractors for the job
- Referrals: look for at least three positive referrals
- Each contractor you're interested in should submit a formal bid. Choose the contractor who fits your budget and demonstrates the ability to do a good job.
- 5
Have a walk-through with the contractor. Once you have chosen a contractor, you may need to do another walk-through of the property. Your contractor can also help you make adjustments to your budget and checklist. - Set a timeline for completion once you have everything in place with the contractor. This will keep all involved parties accountable and on the same page.
- 6
Get any necessary permits. Permits are typically required for rehabbing a property. Having the required permits in place will help you avoid violation of local building codes. Contact your local building department to determine what you need. This will vary based on the type of work you'll be doing. - Typical renovations that require a permit include installing new electrical wiring, expanding floor space, installing a fence over six feet tall, and anything that involves a public sewer line.
- Tasks such as installing a roof, putting in new flooring, painting, and replacing windows and doors usually will not require a permit.
- Your contractor can help you procure permits.
RSS Feed
