When everyday people dive into renovating a fixer-upper, they often regret not enlisting the support of a contractor in advance. The lucrative return on investment of reality shows sometimes oversimplifies the process. As construction professionals sometimes warn, what you don't know can cost money.
That's why it's essential to work with a contractor when considering a house-flip or buying a blighted single-family home. While it seems reasonable to work with an experienced contractor to get good results, can that relationship also result in increased equity? It may come as something of a surprise but working with the right contractor can make you money.
Potential homebuyers sometimes find themselves pressed for time and they cut corners. Rather than hunker down and thoroughly vet construction outfits, they field quotes and run with the lowest bid. Instead, these are vetting strategies worth considering:
Selecting a reputable contractor ranks among the best ways to ensure a positive outcome. That comfortable relationship may prove invaluable if the project hits a snag.
It's not uncommon for people investing in a fixer-upper to apply for a mortgage. Lenders typically require potential buyers to provide a renovation estimate from a licensed and insured contractor. A wide range of fixer-upper loan products are available for qualified borrowers that include the following:
Having an experienced contractor craft a renovation budget with you can improve your odds of securing a loan on the lower side of the interest scale. Many of these loan products allow qualified applicants to borrow based on the listing price, renovation cost and the anticipated fair market value once complete.
At first, potential homeowners may not be able to see the increased equity through all the calculations and sawdust. However, the first place you can find equity is in the loan application part of the project. The assistance of a contractor can be instrumental in securing the right amount for a loan. Beyond the borrowing aspect of the project, going with an inexperienced contractor may cost you. These additional costs may include underestimating rising material and labor costs. Buyers also sometimes find themselves buying expensive power tools and failing inspections rather than handing off construction tasks to a pro. All those unnecessary expenses reduce the equity you would otherwise enjoy if you worked with a contractor from the very beginning.
Kimberly Kelly decided to get her real estate license when she moved to South Orange with her family and fell in love with the classic, period homes of the area. Having worked in the city for many years for LexisNexis, Kim understands the appeal of an easy commute to NYC. That’s why she specializes in towns along the Mid-Town Direct train line, offering welcoming communities, good schools, and space to grow.
Very active in her children’s school PTA, Kim knows firsthand how important a school system is to parents looking to make the move to the ‘burbs. She volunteers with fairs, fundraising, and other activities that bolster support for education. Kim also believes involvement in the greater community enriches us all and has sat on various boards & associations throughout the years.
Kim Kelly has lived many places throughout her life, from Pennsylvania to Oregon, but has found New Jersey to be the ideal place to raise her family and put down roots. She loves nothing more than helping others discover their special place as well. Kim’s extensive knowledge of the area, combined with her sense of community, offers clients a personalized guide to finding the right house - and town - to call home.
