Every once in a while, your rental property will have an insurance claim. This can be an opportunity in disguise. Today, we’re talking to Will at Texas Reconstruction, who is explaining how to use an insurance claim to make a rental property better. Will has identified three ways to do this.
General Reframing of Your Property
If you find yourself in a situation where your house is completely gutted, or a portion of the house is stripped down, it’s easy to work with your restoration contractor to reframe the house and its walls. This is an opportunity to reposition certain rooms before the drywall goes back on if you’ve had a fire or a flood or some other emergency. For example, if your property is a large two bedroom, you can turn the home into a three bedroom. It’s easy to reframe another wall or open up a kitchen.
Reallocate Your Insurance Dollars
The insurance company is going to provide you with a scope of work. There will be different dollar values for different line items. So, you might have $5,000 for flooring, and $5,000 for cabinets and countertops. There is no problem with deciding to spend less money on flooring, and directing the rest of your flooring budget to those counters and cabinets. If you know a guy who can put in a floor for less than $5,000, there is nothing wrong with reallocating those dollars. The insurance company won’t care, and your contractor can do it. This is an opportunity to upgrade certain parts of your house without spending additional money.
Spending Additional Money Outside of Insurance
Finally, you can always spend money above and beyond your insurance payment. If you get $5,000 for flooring and $5,000 for counters, you can decide what you want to do with the house. Perhaps you’ll want to add $2,000 to each $5,000 allocation. Then, you can spend an additional $4,000 to upgrade your floors, cabinets, and counters. This is the perfect time to do it, because everything is already stripped out. The expense will be less than it would be later on, when you’d have to pay for demolition and pulling everything out. It’s no different for a contractor to put in one type of counter or another. You can improve your house while other repairs are going on.