Investing in real estate has always been a great way to diversify a portfolio. However, those looking for substantial profits will want to start taking a look at distressed properties for sale in the Chicago area.
One of the primary reasons for doing so is that distressed properties often go for about 50 percent of its actual value, especially for homes that have already been foreclosed. Any investor worth his/her salt can see that these properties are a steal.
Of course, you’ll have to conduct a few Chicago remodeling projects if you want to maximize your return on investment (ROI). Keeping that in mind, here are a few remodel suggestions that offer the highest ROI:
According to the 2014 Cost vs Value Report from Remodeling Magazine, adding a composite deck to a home can yield a 103.7 percent ROI! Opting to add a wood deck yields a 95.9 percent return. This highlights how much buyers value low-maintenance amenities.
Minor Kitchen Remodel
Not every kitchen remodel calls for an extravagant change. Replacing a few countertops or flooring and updating your appliances can give a kitchen the facelift it needs. In fact, minor kitchen remodels (102.9 percent) yield a higher ROI than a full-scale remodel (78.2 percent).
You should note, however, that these projects often require a good amount of capital. It’s possible that you’ll find homes that require multiple repairs, which could exceed your initial budget. An article from How Stuff Works provides a way around this potential problem:
“Any time you purchase a home, you need to have a thorough home inspection. That inspection becomes even more important when you’re considering a short sale or a foreclosure, because these types of sales are always “as-is”.
Unlike typical home-sale situations, the seller of a distressed property won’t take responsibility for damages to the home at the time of the transaction. Instead, you as the buyer take responsibility for any necessary repairs once you sign the sale contract. Since the listing prices for distressed homes are already typically lower than comparable sales, banks usually won’t give price concessions to account for any repairs…
The inspection will give you an idea of how much money you might eventually have to spend getting the house move-in ready…”
Before you send a formal bid on the distressed property, you should visit the property with experienced Chicago remodeling contractors like DAL Builders.
Distressed properties might not be pretty to look at now, but a smart investor should be able to see these homes for what they can become. If you can do so, that run-down house you just bought can easily turn into one of your primary cash cows.
(Source: 10 tips for Buying Distressed Properties; How Stuff Works)