The method in which a property is rehabbed is one of the most important aspects an investor must consider when purchasing a property. The rehab work on many “turnkey” properties consist of a coat of paint and a for sale sign. This will leave an investor with many headaches down the road and turn a good investment into a bad one. We handle our rehab work on our properties differently than most. Here are the principles we adhere to when rehabbing our properties:
5-Year Rule: When we enter a property to begin the rehab process, we adhere to our “5-year rule” principle. In essence, if we feel anything in the house will falter in the next 5 years, it gets replaced during the rehab process, no matter what the cost or time involved. The “5-Year Rule” applies to the entire property and is our basis for operation on each and every property. This principle helps the investor have the peace of mind that the property they purchase has been fully rehabbed and is a true turnkey property.
Cosmetics: Applying the “5-Year Rule” does not complete the task of fully rehabbing a property. There are many cosmetic upgrades that must be made on a property as well. For example, a kitchen floor may be in great condition but, is avocado green in color and clearly a relic from the 1980s. We replace items such as this along with other cosmetics such as fixtures, countertops, old paneling, etc. This principle helps the investor have the peace of mind that the property they purchase has a newer, more modern feel that will be more appealing to future prospective tenants.