Investing in rental properties is the way to go in Real Estate today, but finding a unit that is priced right and in a neighborhood with a high profit potential and a pool of suitable tenants can be difficult. For some, there is a desire to “flip” foreclosure properties or properties that have not been well maintained. When you see those ads for properties at rock bottom prices that claim they are a “handyman’s dream”, it can be tempting, but are these properties ever worth the expense and the time required to make them suitable?

Investing in damaged properties and poorly maintained properties is absolutely risky, and you may find it hard to get financing for them. But if you have the income to purchase, it may be worth your while to hire someone to inspect every aspect of the property and appraise the repairs. In some cases, especially for landlords who have plumbers, electricians, and contractors willing to work for the right prices, these properties can actually be a good investment, provided the price of the property and the price of renovation still mean that profits will start being turned in a reasonable timeframe.

In some cases, you will get lucky and most of the repair work needed will be cosmetic. Paint, landscaping, and new energy efficient doors and windows can turn an awful looking property into a space that people will clamor to get into. The problems arise when the issues with the property are things such as mold damage, cracks in the foundation, or significant problems with aged plumbing and electrical wiring. These things can be very costly and in some cases, repairs can end up totaling more than the price of the property itself.

Knowing whether or not to invest in that “handyman’s dream” takes a lot of research and a lot of risk. The reward can certainly be significant for some buyers, especially when the repair total is low and the property value increase is high. Flipping houses is traditionally for people who are looking to simply re-sell, but when you are able to convert a Rental Property in the right neighborhood, you will find that the increase in rent and the ability to maintain the property for decades actually offers you the chance for even higher rates of return, provided you purchase the right property at the right price.