When it comes to real estate investing those who are looking for unique methods of investment that are radical departures from traditional methods will be sorely disappointed. No, that does not mean that there are no new innovations present in real estate investing. Actually, new spins on traditional investment strategies are developed by innovative minds everyday. However, there are a finite number of basic methods of investing that have worked in the past, work today and will work in the future. Such is the case with the renovation of a downtrodden home in order to increase its value for resale.
This is a very simple concept: a home that has fallen in disrepair will be acquired at a cheaper rate than one that has been properly maintained. Then, the new owner fixes up the property which will increase the equity of the home. Hopefully, the costs of the repair will be below the equity value of the home making this a quick profit. Then again, a quick profit is not even necessary as long as the value of the home increases over time and this value exceeds all costs associated with the home.
Does this mean the process of repairing a home is easy? No, this can be an involved process depending on your personal situation. So, if you have never entered into this type of repair work then you probably would not want to swallow a project that will require tons of renovation work. Perhaps a home with a few renovation needs would be best to start with such as a home that needs a roof, new aluminum siding or a paint job as individually the costs of these repairs will be less than a collective of all these repairs.
Now, if you are able to perform the repairs yourself you are in a very strong position. For example, if you are able to paint a home yourself the costs associated with this venture will be the raw materials required for painting. If you hire a painting company not only will you have to pay for the raw materials but you will also have to pay for labor. Additionally, if someone else is performing the labor you are not in control of the amount of time required to finish the job. This statement is not designed to dissuade people who wish to outsource their repair needs it is simply designed to place the costs into their proper perspective. It is also designed as a way of motivating those who have the ability to do repair work themselves to get into the real estate investing game.
Many homes in need of renovation are not disaster areas. They simply are the result of benign neglect probably because of budgetary constraints, age of the owner, etc. But someone with the desire to renovate the home and restore its previous grander can do well in real estate investment. It has been done successfully before and it will continue to be done successfully in the future. Let that act as your inspiration.