By Andy Meredith
Candis and I have been restoring houses together for a few years now, so we’ve seen our share of ups and downs in the markets where we restore and renovate houses. If you’re building a restoration business, you might be a little bit scared of what happens when markets are down and houses aren’t selling at good prices. Well, fortunately, in this business, you have a few strategies to stay afloat and keep restoring and selling homes, even when the market is really tight.
Study the Markets in the Areas Where You Want to Restore Houses
First of all, a down market might actually be good news for you if you’re looking for a property to start restoring. It depends on why the market is down, how long it’s been in a slump, and what it looks like for the next few months.
If you’re looking at a house in a down market, you’re probably looking at getting a really great deal on it. Before you buy, though, look at a couple of things. First, check out market values for homes in the area over the past 18-24 months. If they’ve been holding steady or have been in a slow but steady decline, you could be nearing the bottom, and they could be on the verge of rising again.
However, that’s only going to happen if there is a market catalyst in the area. So take a drive and look for things like a new school, parks and playgrounds, or a new shopping center that people are excited about. Any of those could be the catalyst that the area needs to bring it back. If you find an area with a down market that’s about to bounce back, you’re looking at a great deal, and by the time you’re done with renovations you could be in for a really great profit.
Buy Low, Sell Low
Now, as Candis has pointed out before, we’re not house flippers, so we don’t work as fast as some real estate investors, and some of our renovations are a little bit more involved because we’re trying to restore historic homes. That said, because a lot of the houses we buy are so distressed, we can usually get them at really low prices.
Then, because we do most of our restorations ourselves, we come in at a surprisingly low budget for renovations. That makes it easier than you might think to sell our restored houses at below market values when we need to while still making a profit. When buyers see a newly restored historic home for sale below market value, they get excited. It almost doesn’t matter what the market is doing because old home enthusiasts will find a way to buy a beautifully restored house.
Widen Your Search for Houses in Different Markets
Finally, don’t get stuck in a single neighborhood or area. Widen your search for potential restoration properties, and you might be surprised at all of the opportunities you find out there and how different markets that are just miles apart can be.
If you work consistently and you create high-quality restorations, you’ll always be able to find projects, and you shouldn’t have any trouble selling them when you’re done. Plus, if you’re like Candis and me, you’ll be doing what you love and making money restoring little pieces of history all around you. Just keep at it and follow these tips, and you should be able to stay afloat in any market.