|LM says: Sebastian, doing the work yourself is a possibility. However it is not always going to save you money. I would not consider doing the work myself, first, because I don’t enjoy doing that type of work ;-), second, I am not any good at it so the final product would not be good and finally because it is not an efficient use of my time. |
There are several things you should consider before deciding to invest in a rehab property and planning on doing the work yourself.
First, determine the complexity of the rehab. You know your skills and what you can do, however an investment property is not the place to learn how to roof a house or to do drywall. If you know something well then go for it but if the house needs a lot of repairs and they are complex repairs consider calling the professionals.
Second, consider how much
time it will take you. If doing it yourself will cause the rehab to take 3, 4, 5+ weeks while if you hire it out it can be done in 2 weeks then reconsider…In this market prices are changing quickly. So if you hold the house a long time the price you thought you could sell it for can change in the time you are rehabbing it.
Third and most importantly, how much is your time worth? Do a quick calculation of the time it’s going to take you to do the work. Then give yourself an hourly rate…how much is an hour of your time worth?
If your time was worth, say $50 or more an hour, then I can assure you, you can hire contractors for less than this. If your time is worth less then you might be able to find better ways of earning this much or higher.
Also consider that you might save some money doing it yourself but if it takes you longer to get the work completed then time is also money so in the end you might not be saving enough. You mentioned you are at home for 3 months at a time. If you factor in the time to find the deal, negotiate, purchase, rehab and put on the market, that could easily take up your 3 months.
Finally remember that you can hire out repairs but you cannot hire out finding a deal. I learned that early on…I am the only one that can find me a good deal while on the other hand there are 500 different people I can hire for drywall…
If I was tied up for weeks or months doing rehab work when am I going to find the next deal?
This is just my opinion, hope it helps.