February 8, 2017
Buying a Fixer Upper Rental Property? Consider Hiring a Property Manager Before the Renovation
My father was an engineer and MIT graduate, and as such, he enjoyed designing and building things. In fact, we lived in a house that was constantly the site of a home improvement project, and over the years, he added four or five additions. Building things was my dad’s hobby, and he had a special affinity for “fixer uppers,” including vacation homes that he would ultimately turn into rental properties.
That said, most folks don’t perform their own renovations or repairs when acquiring a “fixer upper.” Most property owners hire a contractor to perform the repairs and renovations. Anyone who has ever hired someone to perform repairs, renovations, remodeling, or a restoration knows that it’s no small feat, and the challenges are multiplied when the work is being performed on a vacation home. It’s generally not possible to monitor the work as you could if it was being performed at your home.
But this is an area in which a property manager can assist. In fact, your property manager can be a very valuable ally if you choose to acquire a fixer upper as your next vacation home and then opt to perform upgrades and renovations to that property.
What Are the Benefits of Buying a Fixer Upper as Your Next Vacation Home?
When it comes to acquiring a new piece of real estate, opting for a “fixer upper” gives you an opportunity to see significant savings, provided that your offer on the property is properly adjusted to account for the repairs and upgrades that need to be performed.
What’s more, you will have the benefit of getting to renovate and repair the home in a way that’s consistent with your personal tastes, and you’ll see a significant benefit in terms of desirability if your vacation home is newly upgraded. “Newly renovated” is a major selling point if you seek to rent the property.
One major consideration, though, is whether the property can be rented as-is before any improvements, repairs, or renovations are performed. This is the first area in which your property manager can assist, as he or she can provide you with insight into whether the home is in a suitable condition for rental. If the home is in need of a lot of work, the challenge of finding guests, combined with the modest rental fee, may not make renting worthwhile. But your property manager can help you evaluate your vacation property in this way, offering an honest opinion and evaluation.
If your property cannot be rented as-is, then you will need to take this into consideration from a financial perspective, since it will not be a viable income source until you have the funds to make the renovations, repairs, and upgrades.
How Can Your Property Manager Help Make the Renovation Process Easier?
Your property manager can help you throughout virtually every step of the process of renovating, remodeling, and repairing your vacation home. Your property manager may be able to offer a recommendation for a reputable local contractor who is reliable, performs high-quality work, and offers fair pricing.
While you can visit websites, view photos and videos of the contractor’s work, and call some of the contractor’s former clients for references, there is no substitute for seeing the contractor’s work in person. So even if your property manager does not have a “go-to” contractor to recommend, he or she may be willing to visit one of the contractor’s recent projects to get an accurate “in-person” feel for the overall quality of their work.
Many properties can be rented out as-is, and then during the “off-season” or during a period of several weeks of vacancy, you can call in a contractor to perform the upgrades and repairs. Your property manager will play a key role if you opt to pursue this avenue since he or she can help you determine the ideal time to perform the work. With the right strategy, you can minimize any financial losses since you can get the renovations completed at a time when the property is vacant or at a time of year when the rental fees are reduced.
It may be necessary to perform the work in stages, particularly if you’re working around brief windows of vacancy or if you’re performing some the work yourself. If this is the case, your property manager can work with you and the contractor to develop a work schedule. You will need to consider:
- How long various elements of the renovation or repairs will take to complete.
- When the property will be vacant for a sufficient period of time or when you can take it off the rental market while minimizing financial loss.
- Which repairs or renovations will bring the greatest benefit and advantage to your guests (and to your property’s overall marketability).
- How seasonal limitations may come into play. For example, if the rental off-season is winter in a region that sees freezing temperatures, it may be challenging or impossible to perform certain elements of the renovation during the off-season. For example, painting or pouring cement can be extremely challenging and far more costly in freezing temperatures.
In addition to helping you to develop a game plan and schedule for the work that needs to be performed, your property manager can, in many ways, serve as your proxy if you’re hiring a contractor to perform the work. Your property manager can help ensure that the work is performed to an acceptable standard while also communicating with the contractor so that you minimize the chances of any delays or cost overruns. These are all tasks that are very challenging, if not impossible, to perform from a distance, so your property manager can prove to be a valuable partner in this regard.
In all, your property manager can go a long way toward making the renovation and repair process less stressful, while also minimizing the cost in terms of overruns and in lost rental opportunities.
When done right, a fixer upper can be quite profitable for you as a property owner, and when all is said and done, you’ll have a beautiful vacation home that also doubles as an income source. It’s a win-win.
When it comes to finding the perfect property manager and getting an idea of what you can earn by way of vacation home rental income, Rented.com can help. By creating a free profile on our site, you can be matched with property managers in your area, and you can choose the one that’s the best fit for you. What’s more, our rental income calculator helps you estimate how much you could make by renting out your vacation home. Check it out today, call +1 (844) 736-8334, or chat with us below for more information.
Lead image: Pixabay user paulbr75