DESIGN
RENOVATION ROI TIPS
5 Renovations That Add Value to Your House Flip YOUR GOAL SHOULD BE TO MAXIMIZE THE AMOUNT OF VALUE YOU CREATE IN YOUR PROPERTY WHILE MINIMIZING THE AMOUNT OF CAPITAL NEEDED TO ACHIEVE THAT VALUE.
By Ryan Zomorodi
lipping houses involves buying a below-market house and
home. A house with a nice walkway, maturing trees, and pleasantly situ- ated bushes and flowers has strong curb appeal. The goal of a house flip - per is to make the home appealing to a potential buyer. Nothing is less inviting than a home that has a disheveled and disoriented front and backyard. A simple but effective renovation project you can focus on is ensuring your house has an inviting façade. This can be achieved by mowing and edging the lawn, replacing any weeds or dead shrubs, planting flowers and trees, removing debris and other eyesores, and painting the front door and window trims. These types of renovations are not particularly costly; however, they are tremendously valuable and effective in increasing the home’s value. 2. KITCHEN UPGRADES The No. 1 driver of a home’s value is its kitchen. The kitchen is where families spend most of their time and, thus, is the main driver of a house’s appeal. Though at times it can be expensive to upgrade a kitch- en’s cabinetry, add state-of-the-art appliances, and install backsplashes and granite countertops, it is well worth it. The value you’ll create will bring tremendous joy to your
buyer and, of course, tremen- dous profit to you.
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renovating it to increase its value. Generally, the goal is to increase the value by a dollar amount greater than the costs associated with purchasing and renovating the project. In a sense, the investor’s goal is to make 1+1 = 3. For example, if nearby houses have recently sold for $200,000, the goal of the house flipper would be to pur - chase a property with an after-repair value (ARV) of $200,000 for $125,000. The flipper would then renovate the house for less than $75,000 to ensure a nice profit when the property is eventually sold for $200,000. However, not all house renovation projects are the same. Different states, neighborhoods, and market conditions can play a large factor in the investor’s ability to profit off the investment. Regardless, despite some of the uncontrollable challenges associated with flipping houses, there are a number of ac- tions a flipper can take to add value to the house on a consistent basis. This article will address five renova - tions that add value to your house flip.
3. BATHROOM UPGRADES Like the kitchen, bathrooms show the home’s age, value, and vulnerability. A delightful kitchen could be easily diminished if coupled with a less-than-ideal bathroom. An outdated sink, antiquated vanity set, broken mirrors, and out-of-style shower could all be tremendous drags on the home’s desirability. If you’d really like to increase the value of your flip, consider updating the bathroom. New paint, fresh tiles, and a more modern shower and vanity set could make your house far more desirable than others on the market. 4. LIGHTING UPGRADES As you can imagine, fixing up a kitchen or updating a bathroom’s configuration could increase a house’s value, but those types of major renovations require a substan- tial investment. Adding top-notch appliances and state-of-the-art vanity sets could cost as much as $20,000 or more. So, what can you do if you’d like to increase the value of a home without necessarily breaking the bank? The answer is lighting updates. Lighting might be the most effective way to increase your home’s
1. L ANDSCAPING (CURB APPEAL)
In many cases, landscaping is a homebuyer’s first impression of a
26 | think realty magazine :: may – june 2023
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