Investors who intend to make any serious money fixing up run down houses must constantly police themselves against “over-fixing” or fixing stuff that doesn’t count for much! For example: Don’t waste time changing the wall paper or redesigning the hallway. It’s not cost effective! It’s easy as pie to fall into the over-fixing trap and it’s about the quickest path I know of going to the investor’s poorhouse.
Fixing rundown houses for profits is not the same thing as remodeling houses! If it were, lots of custom builders and remodeling contractors would end up rich…And, handyman-types, like me, would probably be working for them! Fixing houses the way I do it has a lot more to do with budgets and accounting than with hammers and wallpaper! There’s no question that fixing is my goal all right, but only if there’s profit to be made. Don’t forget that last sentence unless you plan to do this for a hobby.
Successful house fixers must learn to concentrate their time and money on things that clearly have some proven pay-back value. Improvements made on the basis of personal taste are generally not worthwhile. You must never forget… It’s your customers (tenants or buyers) you’ll need to satisfy! Exterior painting is one of the most productive jobs on the fix-up list. It’s not unusual to spend $100 painting and get back $10,000 or more in added sale profits. You’re accomplishing high leverage fix-up when you can spend one dollar – and get ten dollars back!