Are you considering renovating a fire-damaged house? If so, here are some tips you can follow to make the process go easier.
Tip #1 – Dealing With the Insurance Company
The claims process for a fire-damaged house is certainly not quick and easy. To make things simpler for you over the long run, you should attempt to stay as organized as possible throughout the process.
That means record or keep copies of all receipts, bills and contracts! You should also document all living expenses and any matters that come up regarding your house fire or the claims process. Then keep all this information in one easy-to-access place. Don’t trust your insurance agent to take care of things for you or to keep track of all the paperwork. You need to do it!
Here are some additional things you should do:
- Take your own photographs of your damaged home and the damaged property inside it. You should also take photos as repairs are made
- Take notes and keep them whenever you talk to your insurance agent, the adjuster or anyone else involved in the process
- Keep a chronological log of meetings and phone calls you have with agents, adjusters, contractors and other involved in the process
- As we said earlier, keep all bills and receipts. Also never send an original bill to the insurance copy without keeping a copy for yourself
Tip #2 – Approach Your Home Renovations Like a House Flipper
One way to approach renovating a fire-damaged house is to view yourself as a “house flipper.” These are real estate investors who buy a house and then quickly resell it for a profit.
First, let’s learn a little more about house flipping. There are two basic types of house flipping:
- The first is when an investor buys a property, also known as a “fixer-upper,” that has potential to increase in value with the right repairs and updates. After completing the work, the investor is able to sell the house at a price that is much higher than what he or she paid for the property.
- The second type is when a real estate investor buys property in a market where home values are rising rapidly. In this case, the investor makes little to no updates on the property but after holding the property for a few months is able to resell it at a higher price.
When done properly – that means making wise buying decisions and being smart with the home renovations – flipping can be a great investment method. It’s a way to make significant profits as you can sell the house for much more than you paid for it.
Of course, flipping can also go wrong. For example, what looked like a good investment can into a “money pit” that has a poor foundation, or a leaky roof or other problems that cost you more money than you planned and reduce your potential profits.
How This Helps You
It can help you think through the entire process and determine if the renovations you are making are worth it.
For instance, if you plan on selling the house can you realistically get the cost of the renovations back in the sale price? If you are keeping the house, will the renovations maintain their value should you decide to sell the fire-damaged house later on?
What To Do Before Starting Renovations
Here are some things all house flippers do – and you should do, too – before investing in renovations:
1. Have the home inspected by a professional.
Just like a house flipper who has a home inspected by a professional, you should, too. It’s important to know how much damage your home has sustained and what the repairs could cost. There may be damaged that is not easily visible to the eye that a professional inspector can identify so you are not surprised later on.
2. Study the market.
One way to identify hot markets is to work with an experienced local real estate agent, one that knows the area like the back of their hand.
3. Set a budget and stick to it.
Know your price range for completing the renovation project before you get started and then adhere to it closely.
4. Be smart with your renovations.
That means stay on budget and focus on renovations that actually boost the value of the home. Don’t get carried away and make a bunch of renovations that won’t actually pay off down the road.
Some more things you can do like a house flipper that can help you in ensuring a good outcome with your fire-damaged house include:
5. Become knowledgeable about the area.
One of the best things a flipper can have going for them is an understanding of the area where they are buying houses. If you know what markets are hot … if you know what the schools are like and where the best amenities are … you can make the best renovation decisions going forward.
6. Become a good estimator.
To succeed at flipping houses you must be able to accurately estimate the cost of any repairs you are going to be making so that you can pursue deals that will net you the most profits. As the owner of a fire-damaged house you need to be a good estimator, too, so that you don’t end up making unnecessary repairs or going over budget.
7. Have patience.
Finally, a good house flipper will have patience and so should you. Don’t rush into an agreement with the first contractor you meet with. Don’t simply OK all of his renovation recommendations. Take your time and carefully analyze everything.
How to Avoid the Renovation Process
If you are wary of going through a long, potentially costly renovation process for your fire-damaged house, there is another option. You can sell your fire-damaged house “as is” to We Buy Fire Damaged Houses.
We pay a terrific price and all in cash so that you get your money fast. Your insurance settlement combined with your sale profits could allow you to get an amazing home in an amazing neighborhood.
Fill out the form below to learn more.