Published 4/25/22

Want to Upgrade a Fixer-Upper? Know How to Proceed to Get the Most Profit

Purchasing a home in the Greater Philadelphia area, renovating it, and then flipping or renting it can be a profitable investment. However, you should know a few tips, or you could find yourself losing money. Franklin Investment Realty will be there to guide you through the process and here are a few tips below.

Renovation 300x200Image via Pexels

Consider a Real Estate Owned Property 

A real estate-owned property is one taken by a lender due to failure to pay. You can find listings for REOs in Philadelphia and the general vicinity on a real estate listing site, such as realtor.com. You can also check for listings through an auctioneer or on a bank or government site. Typically, an REO property is less expensive than a standard listing.

Be cautious as you look for REO properties, though, because some may need significant repairs. Take into account the location and the nearby amenities. These play a major role as to whether the home will sell or entice renters. Additionally, get an appraisal to determine the listing price compared to the actual value.

Rent or Sell 

Carefully weigh the pros and cons of renting or selling. Keep in mind that you’ll be responsible for the yearly taxes, even if you have periods when the home is vacant, if you rent. You’ll also need to maintain the house and make repairs as necessary. If you sell the home, you’ll only need to worry about paying taxes once. In addition, you may need to make certain repairs before closing if you sell.

As a general rule, a home that you sell is held to higher standards than one you rent. Therefore, if the house needs significant repairs after the renovation, it may be in your best interest to rent the home.

You should also take into consideration the housing market. If the current conditions are in the buyer’s favor, you may want to rent first and sell when it’s a seller’s market.

When marketing the house, be sure to list it widely online with good photography. Use the best online image size converter to guarantee that your images look their best on each website. You can also use social media to publicize your listing.

Know Your Responsibilities and the Law

Know what you’re responsible for first before renting a home. Firstly, and possibly most importantly, you’ll need to comply with Pennsylvania laws. For instance, you must take care of major repairs, such as a broken toilet or heater. If you don’t keep the property up to code, a tenant may have a legal reason to withhold rent. 

You’ll need a written lease or rental agreement. The agreement should include information, such as the rent price and when it’s due. You may want to hire legal assistance to ensure you’re in adherence to Pennsylvania laws. 

Think About Hiring a Property Manager

A property manager handles maintenance and repair. Hiring one may be especially important if you don’t live in the Philadelphia area since every time something needs to be repaired or maintained, you’d need to be there, possibly outside business hours. It’s also beneficial if you’re busy or unfamiliar with home repair.

You can find local options online. Make sure you read reviews first as you compare. You’ll want to check for licensure and certifications. 

Turn That Fixer-Upper Into Profit 

Ensure your investment is profitable by making a sound decision regarding renting or selling. It’s also essential to understand the law and hire assistance when needed.   

– Rhonda Underhill

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