Should I rehab or rebuild?

[Justin Wijesinghe]

I’m looking for cheaper properties in poor/decent condition that would allow me to use my construction experience and network to increase the value. When looking at properties how can I determine if it is better to rehab or just demolish and rebuild?

[Andres Saias]

Hi Justin,

Thanks for your question. It's a good one, and there are a few factors to consider when deciding whether to rehab or rebuild a property.

The condition of the property. If the property is in poor condition, it may be more cost-effective to demolish and rebuild. This is especially true if the property has structural damage, mold, or other major problems.

The location of the property. The location of the property can also play a role in the decision. If the property is in a desirable area, it may be more profitable to rehab it. This is because there is a higher demand for homes in desirable areas, so you can charge more for rent or sale.

Your budget. Of course, your budget will also be a factor in the decision. If you don't have a lot of money to invest, you may be better off rehabbing a property. This is because rehabbing is typically less expensive than rebuilding.

Once you've considered all of these factors, you can make an informed decision about whether to rehab or rebuild a property.

Here are some additional tips for making the decision:

• Get a professional inspection. A professional inspection can help you identify any major problems with the property. This will give you a better idea of the cost of repairs and whether it's more cost-effective to rehab or rebuild.
• Talk to a contractor. A contractor can give you an estimate of the cost of rehabbing or rebuilding the property. This will help you make a more informed decision about which option is best for you.
• Consider the resale value. When you're deciding whether to rehab or rebuild, it's important to consider the resale value of the property. In general, rehabbed properties tend to sell for more than rebuilt properties. This is because rehabbed properties are often in better condition and have more character.

Ultimately, the decision of whether to rehab or rebuild a property is a personal one. There is no right or wrong answer, and the best decision for you will depend on your individual circumstances.

I hope this helps!