Top Mistakes Investors Make When Renovating Investment Properties

Renovating investment properties—whether for a flip or long-term rental—can be one of the most profitable parts of real estate investing. Done right, it boosts property value, increases rental income, and attracts better tenants or buyers. Done wrong? It can cost you time, money, and your entire deal.

In this blog, we’ll break down the most common renovation mistakes investors make and how to avoid them.

1. Underestimating the Budget

One of the most common (and costly) mistakes is underestimating rehab costs. It’s easy to assume you’ll stay “on budget,” but in reality, materials, labor, and surprises behind the walls can quickly add up.

How to avoid it:

• Get at least two to three quotes from contractors.

• Build in a 15–20% contingency fund for unexpected issues.

• Walk the property with your contractor before closing.

  
  

  💡 QuickDraw Tip: Never rely solely on seller disclosures—always do your own due diligence.

2. Over-Renovating for the Neighborhood

It’s tempting to go “HGTV-style” with high-end finishes and custom upgrades, but if the local market doesn’t support that level of finish, you’re throwing money away.

How to avoid it:

• Study comparable properties (comps) in the area.

• Match renovations to what buyers or tenants expect, not what you personally prefer.

• Prioritize value-adding upgrades like kitchens, bathrooms, and flooring over luxury extras.

  
  

3. Not Having a Clear Scope of Work

Many investors dive into renovation without a detailed plan. This often leads to miscommunication, cost overruns, and project delays.

How to avoid it:

• Create a room-by-room scope of work outlining what gets done and to what standard.

• Include finish selections, brands, and materials so there’s no ambiguity.

• Have your contractor sign off on the scope before any work begins.

  
  

4. Ignoring Permits and Code Requirements

Skipping permits to “save time” is a shortcut that often backfires. Unpermitted work can delay closings, lead to fines, or require rework before a sale.

How to avoid it:

• Check with your local building department about what requires a permit.

• Use licensed contractors familiar with local codes.

• Plan for potential inspection delays in your timeline.

  
  

5. Hiring the Cheapest Contractor

It’s natural to want to save money—but going with the lowest bid can lead to shoddy work, missed deadlines, or worse—being ghosted mid-project.

How to avoid it:

• Check reviews, licenses, and references.

• Don’t just compare prices—compare experience and timelines.

• Use a written contract that includes payment schedules, penalties for delays, and dispute resolution terms.

  
  

  💡 Red Flag: Any contractor who demands full payment upfront should be avoided.

  
  

6. Poor Timeline Management

Time is money, especially when holding costs (loan interest, taxes, utilities) start eating into your profit. Many investors don’t plan for delays—or worse, they cause their own delays by being indecisive.

How to avoid it:

• Create a project timeline with milestones.

• Order materials early and schedule trades in advance.

• Make all design and material decisions before the project starts.

  
  

7. Not Considering the End Exit Strategy

Some investors renovate a home before they’ve clearly decided whether they’ll flip or rent it. This lack of clarity can lead to misaligned upgrades or price miscalculations.

How to avoid it:

• Know your exit strategy from the start: flip, BRRRR, or rental hold?

• Renovate accordingly—flips focus on resale appeal, while rentals focus on durability and ROI.

• Run the numbers for both scenarios to stay flexible if the market shifts.

  
  

8. Trying to DIY Everything

Unless you’re a licensed pro, doing the work yourself often leads to longer timelines, code issues, and even safety risks. Your time as an investor is better spent on strategy and deal flow—not tiling bathrooms.

How to avoid it:

• Use professionals for key trades like electrical, plumbing, and structural work.

• DIY only on low-risk, cosmetic items if it truly saves time or money.

• Factor labor costs into your numbers so you’re not forced into DIY.

  
  

Conclusion

Renovating investment properties is where wealth can be built—or lost. By avoiding these common mistakes and approaching each project with clarity, research, and the right team, you’ll improve your ROI and keep your projects running smoothly.

At QuickDraw Lending, we work with investors every day to fund renovations quickly and efficiently—so you can focus on what matters: adding value and scaling your portfolio.

🏡 Ready to fund your next fix & flip or rental renovation? Let’s talk.