the Wealthy Canadian

Now that you’ve found your hidden real estate gem, it’s time to examine two other aspects of your intended purchase. When do you intend to sell and what improvements do you intend to make? These two questions are interlocked and depend heavily on one another to determine either. A usual place to start would be to figure out possible improvements. This can be determined by having the home inspected by a professional independent assessor. Their final report will tell you what needs improvement beyond the cosmetic.

A lot of investors get stuck with their investment because they bite off more improvements than they can swallow. Look for improvements that you can do yourself. For instance, changing the carpets, repainting or replacing/adding baseboards are ideal for the do-it-yourself investor and can add thousands to your asking price. Unfortunately fixer-uppers often have structural problems that require professional work like replacing the roof, redoing plumbing or electrical and foundation work. You must take these improvements into account because they may cost more than the profit they will generate at sale. Nobody wants to get involved in a money pit.

Sadly, most home sales are a “buyer beware” situation, so it would be good business practice for you to attempt to secure such things as home inspections, home warranties, grow-op disclosure, and pest inspection reports, before entering into a sale.

Now you should consider the time of your sale. Of course this is initially determined by the length of time it will take you to do the improvements, but market health is always a consideration. You can still sell and make money in a depressed housing market, but if you sense a turn for the better, it would be prudent to weigh your costs of holding onto your property.

In our next article, we will discuss rental revenue properties.