Finding a fixer-upper can often feel like quite a discovery, especially if you’re trying to buy something on a budget that you know will pay off in the long term.
Hampton Roads real estate investors looking for some cost-effective and profitable ways to rehabilitate a rental for maximum profit have come to the right place. We’re especially good at this, helping investors to identify the right properties and turn them into highly desirable rentals.
Don’t miss out on the feeding frenzy. Buy something for less than it’s ultimately worth and enjoy reaping the rewards.
Here are some of our best strategies.
Hampton Roads Investment Opportunities
Hampton Roads is a picturesque coastal region that’s popular among tourists and visitors. But, it’s more than just a pretty spot along the country’s east coast. This region is a growing market for a lot of reasons, including the abundant economic activity. With local ties to the military, thriving shipbuilding industries, and a growing tourism sector, real estate investors in Hampton Roads have discovered that for a lot of people, this is the place to be. A high demand for rentals and a fantastic quality of life make the rental market here robust and consistent.
Couple those factors with a rapidly increasing population, particularly among remote workers, professionals, retirees, and military families, and you have a steady stream of potential tenants seeking attractive rental properties.
For investors, this means opportunities. And, if you’re thinking that rehabbed properties are the way to go, you’ll find that you stand a better chance of bringing in higher rents and attracting long-term, reliable tenants compared to outdated or poorly maintained alternatives.
The Fixer-Upper Advantage: Renovating Hampton Roads Rentals
Fixer-uppers often come with a lower purchase price, making them a cost-effective way to enter the real estate market or add to your existing portfolio. This is a good way to diversify an existing set of assets. If you’ve never invested in a home that needs to be rehabilitated before, you may find that this becomes a larger part of your investment strategy.
You’ll earn more right away because you spend less on the purchase. However, the real potential lies in the upgrades you make to boost the property’s value. You’ll earn equity quickly, your tenant will pay down your mortgage, and the longer you hold onto that property - the more you stand to earn.
When approached strategically, these rehabilitated homes can generate significant rental income and appreciate in value over time. Additionally, by addressing any deferred maintenance upfront, you can reduce long-term repair costs while ensuring tenant satisfaction.
This is not a strategy that works for everyone. But, if you’re looking for a fresh way to make some money in the Hampton Roads real estate market, this might be something worth your time and resources.
Benefits of Investing in Fixer-Uppers
Why should you consider this type of strategy as a real estate investor?
Here are some of the things that we like best about buying a fixer-upper and making the necessary renovations that will make it a stunner on the rental market:
Lower Purchase Price. The first and most obvious benefit to buying this type of property: you spend less when it comes to actually making the purchase. There’s a lower initial investment compared to move-in-ready properties.
Forced Appreciation. When you increase the property’s value through targeted renovations and improvements, the value automatically increases.
Higher Rental Potential. Modernized and well-kept homes attract quality tenants willing to pay premium rent. You know you’ll be able to earn higher rents with a modern, recently renovated rental property. It will stand out among all the other listings on the market, attracting the most desirable tenants quickly.
Tax Benefits. You’ll find that the expenses related to renovations and repairs may be tax deductible, and this can help you when you’re trying to decrease your tax liability at filing time.
Additional benefits will depend on your investment portfolio, your investment goals, and your plans for the future.
Key Steps to Rehabilitating Rentals for Maximum Profit
So, how do you do it? Renovating those distressed and below-market properties surely cannot be as easy as many people think it is.
No, it’s not easy. But if you’re prepared with a budget, a timeline, and a team of professional vendors, contractors, and service providers, you’re likely to move through these steps with ease.
1. Choose the Right Property
We call it a fixer-upper frenzy because everybody is looking for opportunities to spend less and earn more with strategic renovations and repairs. But, you have to choose the right property. Otherwise, you’re simply going to lose money.
Remember that not all fixer-uppers are created equal. Look for homes in desirable neighborhoods or growing areas within Hampton Roads. You can renovate a property into something beautiful, but if it’s not in a desirable neighborhood, you might have a hard time attracting good renters.
Gather data on rental demand, nearby amenities, and average property prices to pinpoint the best opportunities.
Stick to properties with structural integrity, as issues like a failing foundation or extensive water damage could turn your investment into a money pit. The idea is that you’ll make improvements, not completely rebuild a house.
2. Set a Budget (And Stick to It)
Successful renovations start with a realistic budget.
Outline everything, from cosmetic changes like paint and landscaping to larger projects such as plumbing or electrical upgrades. Account for unexpected costs by setting aside at least 10-15% of your total budget as a buffer.
Remember, your goal is to maximize the return on investment, so avoid over-improving. You’re not making renovations for yourself; you’re making updates and upgrades that will attract tenants. Garden tubs and bamboo floors are likely not necessary.
Tailor renovations to meet local market demands rather than personal taste.
3. Focus on High-Impact Upgrades
Just as it’s important to be selective when choosing a property, it’s also important to be selective when you’re planning your improvements. Not all renovations will give you an equal return. Stick to updates that directly improve the property’s appeal. Some high-impact, cost-effective upgrades include:
Kitchen and Bathrooms. These are the heart of any home. Modern fixtures, updated cabinetry, and durable countertops can make a big impact.
Energy-Efficient Upgrades. Tenants value energy efficiency. Features like new windows, proper insulation, and Energy Star appliances appeal to cost-conscious renters.
Curb Appeal. First impressions matter. Simple fixes like landscaping, repainting, or replacing an old front door can boost the property’s attractiveness.
Flooring. Say goodbye to outdated carpeting. Opt for affordable yet stylish options like laminate or luxury vinyl planks.
If you’re looking for ways to really stand out as you’re making improvements, consider making your rental property as smart as possible. Keyless entry, smart thermostats, and video doorbells are all extremely popular among modern tenants.
4. Work with Trusted Contractors
Renovating a property requires skilled professionals who can deliver quality work within your timeline and budget. Partner with licensed and experienced contractors, and make sure to collect multiple quotes to ensure you're getting the best value.
Working with a Hampton Roads property management expert will give you immediate access to the right service providers. At Doud Realty Services, we have excellent relationships in place already with the best contractors in the area. These long-term relationships can be leveraged now and for future projects. Repeat collaborations can result in faster work and potentially lower costs.
5. Market Your Property Strategically
Once renovations are complete, it’s time to attract tenants. High-quality photographs, virtual tours, and compelling descriptions go a long way in making your listing stand out. Highlight the property’s best features, proximity to key amenities, and the quality of recent upgrades.
Partnering with a local property management team can also take the stress out of leasing, from marketing to tenant screening and beyond. We know how to best position your newly renovated property in a competitive market.
6. Optimize for Long-Term Success
Once your property is rented, focus on maintenance to keep your investment in top shape. Routine inspections and prompt responses to tenant concerns will ensure your property remains in high demand over time.
Work with Local Experts
Relying on local professionals in Hampton Roads can make a significant difference in your investment’s success. Market knowledge, access to established contractor networks, and insights into tenant preferences are invaluable when working with fixer-uppers.
Fixer-uppers represent a unique opportunity to build wealth in the Hampton Roads real estate market. With the right strategy, you can transform run-down properties into valuable rental homes that deliver consistent income and long-term appreciation.
Let’s talk about how this strategy aligns with your investment goals. Whether you’re investing for the first time or you’ve been building a strong portfolio for years, we can help you make the next move that will take you a little bit further towards building the wealth you’re hoping to create with real estate investments.
Contact us at Doud Realty Services, Inc. We provide expert property management in Norfolk, Portsmouth, Hampton Roads, as well as surrounding areas such as Virginia Beach, Suffolk, Chesapeake, and Newport News.