Rehab to sell is an enticing idea. A recent story published in Realtor Magazine tells of a couple in Cambridge, Massachusetts who wanted to sell their condo. The property, a rental, was in need of renovation. Its owners feared losing value by putting it on the market as is. But they were also reluctant to dip into their own pockets to pay for improvements. Then they met the people at Compass Concierge, one of the unique companies that have reinvented the concept of rehabbing a home.
Compass puts expertise in home renovations to work. They differentiate between improvements that translate into dollars at closing and those that do not provide a return on investment. Then they make improvements that maximize value and receive payment for their services at closing. Its the very definition of a win win proposition. They replaced flooring, repainted, made other cosmetic improvements and submitted an invoice totaling $17,000 for their services. As a result of the renovation, the couple sold their condo at $51,000 above asking. Of course, they were delighted to pay Compass and pocket the difference.
We have explored the advantages of staging in our previous post. But now we have an exciting example of thinking outside the box. The concepts of staging and rehabbing have been popularized by TV networks like HGTV. Shows such as “Love It Or List It” introduced the concept of rehabbing your own home with the option of selling in favor of pursuing your dream lifestyle. Of course, the concept of rehabbing and selling has swept the nation and fostered many a get rich quick dream. But successful rehabbers plan in terms of return on investment. As inventory shrinks, they are plotting a new route to success.
A New Look at an Old Idea
Now a new strategy is born. In today’s market listings are scarce and investors find it near impossible to purchase distressed homes at 50% of their rehabbed market values. But over the last decade many have gained experience and knowledge which have made them experts at rehabbing to increase economic value. Now companies are springing up to take advantage of that expertise. They employ craftsmen who do quality work and estimators who can analyze the effect of improvements on the future value of home. With confidence in the skills of their staff, they enter into contracts to rehab to sell and agree to be paid at closing.
In the end everybody wins. Sellers have a vehicle that helps ensure that they get top value for their homes. Realtors associate with such companies because their work increases commissions and makes it easier to earn them and the companies have created a successful new business model.
The nearest to Ocala that we are aware of such companies operating is Orlando. But why not think creatively? There are quality renovation companies and reputable investors with rehabbing experience in this area. I intend to plant this idea and hope to see it sprout in Ocala.
Think with inspiration. New ideas can yield exciting results.