This biweekly sponsored column is written by the experts at Gordon James Realty, a local property management firm that specializes in residential real estate, commercial real estate and home owner associations. Please submit any questions in the comments section or via email.
When searching for an investment property, you might be faced with the decision to buy a fixer-upper or a home that’s already upgraded. It’s a common question, particularly from those making their first excursion into the income property arena. There are numerous right answers, requiring your thoughtful consideration of multiple factors before you make the leap.
Make your evaluation in light of the three most important rules of real estate:
Whether you buy a home to occupy or rent, a desirable location supersedes all other considerations. Sure, you might find a seemingly fabulous “deal” on a property. However, if it’s in an undesirable location, you’ll face one or both of these challenges:
- Difficulty finding good, qualified tenants
- Needing to charge lower rent to entice tenants
Either of these issues will potentially lower your income, cash flow and profits. Despite self-help articles and books written about getting rich with real estate, owning, maintaining and managing rental property requires hard work. Sure, you’ll enjoy tax-deferred gains while you own the property and favorable tax treatment when you sell, but profits depend on your ability to generate sufficient cash flow to make mortgage payments and pay operating expenses.
Do you really want to risk the cost of having zero rental income while you spend months finding qualified tenants? Or, being forced to lower your rent by 30 to 50 percent just to attract appropriate tenants? Investing in a desirable location can help you avoid these issues.
Real estate fixer-uppers come in a variety of flavors. Ask yourself a few critical questions to make the right decision for you.
- How handy with home repairs are you? What can you do well and what repairs will you need licensed professionals to do?
- Do the properties you‘re considering just need some TLC (thorough cleaning, paint, new carpet, etc.) or major system repairs (electrical, plumbing, HVAC, roof, septic or sewer, etc.)?
- What will necessary repairs or improvements cost you? Is it possible to recoup the cost of repairs with higher rental income or greater appreciation in value when you sell?
Your honest answers to these questions help you determine whether a fixer-upper or rehabilitated rental property is your best option. Further, evaluate the cost difference between buying a rehabbed home and the costs of fixer-upper “deals” plus what it will cost to fix them. Don’t forget to factor in the cost of mortgage, insurance, etc. while it sits vacant during repairs.
To help you judge if you are really getting a deal on a fixer-upper, consider the following:
- Be sure your math works. Estimating the cost to upgrade the property versus buying a property in good shape must work in your favor, at least on paper. Add 10 to 25 percent to your estimate to avoid unwelcome and costly surprises to your budget.
- Seriously consider houses needing minimal repairs.
- Choose fixer-uppers only if you have the time, energy and some ability to do part of the fixing.
- Order a full inspection from a proven, thorough home inspector.
Finally, even if you own only one rental property, consider hiring a quality property management firm in your area to save you time and headaches and give you cost control.
Good Thursday evening, Arlington. Let’s take a look back at today’s stories and a look forward to tomorrow’s event calendar. 🕗 News recap The following articles were published earlier today…
A look at the most and least expensive single-family homes sold in Arlington last month, November 2023.
Eighteen properties formerly within a special “revitalization district” in Cherrydale will soon officially be eligible for redevelopment with 2- to 6-unit homes. On Monday, the Arlington Planning Commission unanimously adopted…
Confused with federal paperwork? Statutes of Liberty breaks down agencies that are involved with immigration.
About Latinas Leading Tomorrow (LLT): Latinas Leading Tomorrow is a dynamic 501(c)(3) nonprofit organization dedicated to empowering young Latina women through education, mentorship, and leadership development. We are committed to fostering a community of future leaders who will make a significant impact to the community.
Job Description: We are seeking a passionate and dedicated Part-time Executive Director to lead our organization into its next phase of growth and impact. The ideal candidate will be a visionary leader who can oversee day-to-day operations, drive fundraising efforts, and cultivate relationships with stakeholders. This is a 1099 position; Remote position with ability to attend DMV events; 8-10 hours a week; $35-40/per hour.
Oversee program operations, including educational and community initiatives.
Ensure compliance with legal and regulatory requirements, maintaining trust and accountability.
Develop and execute a strategic vision aligned with our mission and values.
Lead fundraising efforts in partnership with the Board Members.
Cultivate relationships with community partners, schools, educators, and donors.
Demonstrate strong leadership skills, fostering a positive organizational culture.
Communicate effectively with diverse stakeholders and make compelling public presentations.
Promote inclusivity and collaboration throughout the organization.
Children’s Weekday Program (CWP) is a non-profit preschool rooted in a play-based philosophy. We focus on developing a love of learning and exploration, cooperation, empathy, and independence.
Our caring and experienced educators create opportunities for children 16 months to 5 years old to play, learn, and grow in a nurturing environment of child-centered and developmentally appropriate experiences.
Initially established more than 50 years ago in South Arlington, CWP continues to be a lauded program in the Northern Virginia area. We are extremely proud to have been recognized as a Best Preschool in Northern Virginia Magazine for the last 4 years.
Located now in North Arlington at 2666 Military Road, CWP offers a part-time parents day out and preschool program with options to extend care both before and after school. We offer a supportive and inclusive school community for children and parents alike and welcome all families to join our school!
Holiday Art Show featuring artists: Peter Fitzgerald, Claire Plante, Alanna Rivera, and Suzy Scollon. At the Barcroft Community House, 800 South Buchanan St., Arlington, VA. Dec. 8 from, 2 PM to 8 PM and Dec. 9 from 10 AM to