Remodeling a fixer-upper can be rewarding. However, deciding whether to rent or sell it upon completion is a big decision. Here are some options:
Remodeling Considerations
If you’ve purchased a historic home to renovate, you’ll need to carefully think about your remodeling plans.
Flip Home Renovations
If you plan to sell the home upon completion, you may want to restore fixtures, such as lighting, instead of replacing them. Homebuyers seeking a historic home want a home that looks and feels much as it did when built.
Many historic homeowners update the plumbing and electricity as these are important for safety and convenience. However, they may choose to add as few modern touches as possible to maintain the home’s historic integrity.
Rental Property Renovations
If you plan to rent your remodeled home, you’ll need to consider the needs of potential renters and follow all building codes for rental properties. Renters will expect modern conveniences such as a dishwasher and central air conditioning, and you may want to add an extra bathroom as many tenants expect more than one.
If your home is located in a tourist destination area, it may be more lucrative to rent it as a vacation home. You’ll need to be aware of special tax rules applicable to vacation rental properties. However, a property that’s well-placed in a bustling city like Salt Lake City and close to museums, outdoor spaces, and other entertainment locations will be a worthy investment.
Tourists may expect certain amenities, such as a privacy fence. Luckily, fencing materials exist that will maintain the look of your historic home. Read online reviews to find a qualified contractor before asking for a fencing quote. The average cost of a new fence is around $4,500, but your cost will be determined by the size of the fence, the materials chosen, and your location. When speaking with a potential contractor, ensure they’re insured, licensed, and aware of underground utility line locations.
Landlord Responsibilities
Before you dream of sitting back and watching the money roll in, consider the responsibilities of becoming a landlord. First, you’re required to provide a “habitable” rental property. This means you must maintain the structure of your building, provide water, heat, and electricity, make repairs promptly, and ensure a hazard-free and pest-free living environment.
You may want to inspect the property occasionally for wear and tear. However, owning the property doesn’t mean you can enter when you choose. Check your local laws regarding how much notice you must give a tenant before entering the dwelling.
Cleaning is also a huge responsibility. It can be a great idea to partner with Riley’s Carpet Cleaning for cleaning solutions that ensure the property is always tenant-ready.
Financial Responsibilities
Consider landlord financial responsibilities, such as the cost of both landlord and liability insurance. In addition, you’ll need to decide who will pay the utility bills. Cleaning the unit and making repairs between tenants is an additional expense. Having an emergency repair fund will help with unexpected repair costs.
Even though many expenses are tax-deductible, you’ll owe taxes on income received from your rental property. In addition, property taxes are often higher for rental properties. If you want to be less hands-on, you can hire a property manager to collect the rent and take care of maintenance requests, among other job duties.
Property Options
As the property owner, it will be your decision to rent or sell. If you’d like to remodel another property, selling will provide investment funds. However, if the idea of a steady flow of income interests you, becoming a landlord may be an excellent choice.