The versatility of real estate is its true charm, catering to a variety of needs. If you’re thinking beyond just a single-family home for a long-term residence and considering an investment property for renting, you’re likely to encounter both ready-to-live and restoration project properties in your search.
The primary distinguishing factor between these two is the property’s condition at the time of purchase. The best fit for you hinges on your personal requirements as a homeowner and your aspirations as a property investor. Keep reading to learn about this topic. Then contact Berkshire Hathaway HomeServices at (310) 373-0021 if you need help buying a home.
What Are Ready-To-Live Properties?
Ready-to-live properties are just that – they’re set for occupancy from the get-go, meaning you can start renting them out without delay. These properties could be newly constructed homes or listings that have undergone recent refurbishments. They are in excellent condition when they enter the market. Some companies that focus on renovating and selling such properties might also offer property management services. This option could be particularly appealing if you prefer a less active role in handling your investment property.
What Does Restoration Project Mean in Real Estate?
In contrast to ready-to-live listings, restoration projects, often referred to as ‘fixer-uppers’, are at the other extreme of the investment property scale. Purchasing a restoration project means acquiring a property that requires significant repairs, remodeling, and considerable tender loving care before it’s rent-ready. These properties are potential treasures in the making; you’re wagering on your capability to execute high return-on-investment (ROI) home improvements that will attract prospective renters and bolster your income.
Ready-to-Live Pros
Owing to their move-in readiness, ready-to-live listings have the capability to start generating income promptly. With no impending renovations, you can make the property available for rent as soon as you acquire it. They are ideal for entrusting to a property management company, allowing you to enjoy passive income without having to bother with everyday operational responsibilities. You might even be able to use the listing agent’s photos to enhance the appeal of your rental in your local competition.
Ready-to-Live Cons
There’s a flip side to these advantages. All these benefits come with a higher price tag; ready-to-live properties generally cost more than fixer-uppers. You’ll pay a premium for the impeccable condition and polished presentation of these properties, so having a savings strategy for your home purchase is key. Also, assigning property management tasks to a third party implies relinquishing some control over the renting process.
Restoration Project Pros
As a buyer, looking for homes in less-than-perfect condition can offer some advantages. Restoration project homes tend to attract fewer competing buyers than ready-to-live properties, as not everyone is prepared to undertake a major renovation project. With a well-devised strategy, you can often secure a fantastic deal on these homes due to their subpar condition.
Additionally, your renovation efforts will incrementally increase the home’s value. The more effort you invest, the more the property appreciates, enhancing potential ROI.
Restoration Project Cons
The caveat with restoration projects is that unlocking their potential involves significant investment. The amount you may need to spend on a restoration project will depend on factors like location, home size, and the extent of required repairs and renovations. DIY solutions for some remodeling tasks can help save costs.
However, more complex tasks might require professional expertise. Regardless of meticulous planning, it’s tough to foresee what’s ahead. Projects may overrun budget, material costs may escalate, and market conditions could shift drastically by the time you’re ready to rent the property.
Your real estate agent is an invaluable resource in helping you decide which property type suits you best. Reach out to a local real estate agent to explore ready-to-live and restoration project properties available in your locality.