Overnight News: There’s no guarantee with people, but for houses, rehab is redemption.

I’m finishing a rehab-from-hell right now, and the owner reminded me that we had done another one, seven or eight years ago. But neither of those compare to the worst house we ever worked on – the worst house we ever redeemed.

True fact: Things are either adequate or they are not. If you replace or repair the inadequate things, the home is adequate – turnkey livable. If you can work a little “wow factor” into the budget, so much the better. You cannot lawfully rent an inadequate home, but you can sell one – at a discount. To sell a home at its highest attainable price, you must deliver a turnkey value – the more move-in-ready, the better. That’s the bad news. The good news is that rehab done right nets out to a profit at Close of Escrow: You will sell for more than it cost you to get there.

So here’s a house I’m not in love with in the first place: We’re buying trashed foreclosures at the bottom of the market to rehab and hold as rental properties. It’s four bedrooms, and I like three bedroom homes as rentals, plus this home faces East/West, thought to be bad for exposure to sunlight so penalized on resale. I helped investors buy a lot of houses in the collapse, but this is the only East/West house we bought.

But here’s the prize that sold the house: When they abandoned the property, the former owners left their two Rottweilers behind. The dogs had food, and they were rescued alive. But you would not believe the stench in this home. It made it unsalable – which made it catnip to us. If you want to buy cheap, buy what no one else wants.

So we rehabbed an 1800sf doghouse with all the windows and doors open – in the middle of a brisk-enough Arizona Winter. Carpets out and bleach the slab. Kilz brand primer. Kilz brand paint. New carpets, new counters, new blinds. And just like that, a steady rental for a dozen years.

If there is a housing shortage in the U.S. – and there definitely is one here – rehabbing the existing housing stock is at least half the solution to the problem.

In other news:

CNBC: Homebuilder sentiment improves for first time in three months after a big drop in lumber prices.

Points and Figures: A Handy Guide to Moving From A High Tax State to A Low Tax State.

The Federalist: Only Nine Months In And The Biden Presidency Has Failed Spectacularly.

City Journal: Contra “Root Causes”: What the work of James Q. Wilson can teach us about the fight over criminal justice today.