Rehabbing a house is one of the most profitable things you can do as a real estate investor. Basically the goal with this activity is to obtain, or lock up on contract depending on the circumstances, a distressed property for well under what its fair market value is, and preform the necessary repairs to make it much better and substantially raise its value. The goal after all of this is done is to then take the property and sell it for much closer to what its fair market value is, which means you end up with a very neat profit in the end. This is a very common practice in real estate, and many people get into investing in the real estate market for the sole purpose of buying, rehabbing, and flipping distressed properties. The profit to be made at this practice is potentially some of the highest you can make in the real estate game, especially depending on the frequency of your flips. You can buy a property at anywhere from thirty to sixty percent off of fair market value, do some low cost repairs your self, and then move it very quickly for a devastating profit. The ability to profit so greatly is partly due to the fact that the distressed properties you might be purchasing will be in very high demand as soon as they are in better condition, but many people just plain out lack the funds and/or motivation to do it themselves. This is where you, as an motivated and informed investor, step in and make your profit.
Rehabbing a home might also be something minor to a knowledgeable real estate investor. For instance, sometimes when HUD lists the properties on their lists, they list they total livable square footage all wrong. This might be, for example, a twelve hundred square foot home that they listed only as eight hundred square feet because the two bedrooms upstairs did not have heating ducts. So a simple thing for you as an investor to do is to buy the property, install the heating ducts upstairs, and then list and sell the property at a much higher price and make a very good profit. This simple little bit of rehabbing might only cost you a few hundred to a few thousand tops, but will end up raising the appraised value of the home tens of thousands of dollars. Other minor things might be purely cosmetic, such as landscaping, painting, new carpet, and other things of that nature. This also won’t cost much but may dramatically increase a property’s value. Therefore, if you are looking to invest in real estate, rehabbing homes is an avenue you should seek to pursue.