As the housing market continues to improve, there are more and more real estate investors entering the market. Both experienced and new investors are taking advantage of the successful housing market to increase profits. Although there are many great opportunities available in the real estate market, it is important to look out for the following housing problems. Some housing renovations are easy, while others require more experienced knowledge and a greater investment.
Mold and water damage
Excessive water damage that is not treated properly quickly turns into mold. Mold spores in the air can cause breathing problems and a variety of other serious health conditions. You can usually identify the possibility of mold by looking for signs of water damage. Water damage is shown with differing colors of paint and wood. In some cases, the wood will begin to decay and crumble. Correcting water leak repairs is not enough if excessive water damage has already occurred. Mold cleanup services are also needed.
The problem with water damage is that left untreated, it affects the structure of the house. For this reason, it is extremely expensive to correct. Based on Floodsmart, a 2,000 square foot home undergoing 12 feet of home water damage could cost more than $50,000. Furthermore, mold removal can add to those costs. Purchasing an investment property and not considering the possibility of water damage can be financially devastating.
Asbestos is usually not identified until housing renovation begins. It is a dangerous material that was once used in housing builds. However, if you are not aware of what asbestos looks like or how to properly remove it, you can be in danger. Asbestos encapsulation requires extremely specialized knowledge and removal services. Failing to do asbestos encapsulation properly can put workers in danger, as well as future occupants of the house. It can also cause the house to fail air quality tests. Before you begin work on your investment property, understand how to look for asbestos and how to properly contain it, until you can seek professional asbestos encapsulation services.
House fire restoration
Houses that undergo fire damage are often very difficult to repair. Even when they appear minimally damaged, the fire could have affected unseen parts of the house. Fires result from in home problems, wildfires, and even droughts. They are a common cause for insurance claims, producing $1.9 billion in insured losses in 2015. This, however, is below the 10 year average of $2.8 billion. Fortunately, you can usually identify fire damage by the stripped walls and seared flooring. If you are considering rehabbing a fire damaged house, it is best to have it previously inspected to get a better idea of the needed repairs.
Plumbing is a commonly overlooked problem. When you live in an area with extremely cold winters, your plumbing is prone to problems. If you do not regularly run warm water through your pipes, they can freeze and then burst. Real estate investors run this risk also, as their properties are uninhabited during the rehab process. A problem with the plumbing is not always easily noticeable, yet it requires extensive work. Sometimes, the entire foundation of the house or yard will have to be pulled up to properly correct the underground plumbing system. Winter storms and cold waves caused $3.5 billion in insured losses in 2015, almost double the 10 year average of $1.8 billion. Be sure to carefully inspect the plumbing system before beginning a real estate investment project.
Real estate investors are on the rise. There is a lot of money to be made in the real estate industry, as long as proper research occurs beforehand. Investors looking for a simple rehab project need to be aware of some of the most expensive housing problems. Houses with water damage, asbestos, mold spores, damaged plumbing systems, and fire damage usually require specialized repair knowledge and can get extremely expensive to properly repair.