Property Management Remodeling Your Investment: What Changes Are Worth the Cost? by Nick Nimble June 4, 2019June 3, 2019 by Nick Nimble June 4, 2019June 3, 2019 Real estate investors, whether they’re flipping or renting, see remodeling as a strategic process. Not only do you need to thoroughly understand your location and market, but you also have to keep your eye on renovation ROI and contemporary home design to know where to allocate your remodeling budget. Renovating for investment means you’re not trying to create your dream home but instead make strategic, unemotional choices that will help your home sell more easily and at a higher price when the time to put it on the market comes. This allows you to balance pared down renovations that have significantly decreased costs from the typical homeowner’s remodel with putting together a place where someone will want to live. Read the Location and Let It Decide the Budget Investment renovations tend to be about reading a neighborhood so as to make your property competitive on the market. This actually puts you as an investor in a very good spot for thinking clearly and spending your investment money only on those renovations sure to offer a handsome return. Your budget should correspond to the price range of the neighborhood. Properties rent and sell within a range, meaning your budget has a whole range of factors to consider including its location and style of home. Overpricing your home with renovations will make it an uphill battle for you to get a positive return on your investment. Your renovations should attempt to hit the top of your price range without going over. Remember that renovations aren’t just for direct returns but also to help your property remain competitive. With every larger remodel, you should consider first whether it fits into your location. Then you can start pricing it out for yourself to determine worth. While it’s easy to find a ballpark estimate online, your actual price for renovations will fluctuate depending on materials, shipping, labor, and various demands of the project. Ideally, you want to keep your renovation costs as low as you can. Maintenance Is Always First Before you begin considering your remodels, you should make a list of what needs maintenance. Don’t gloss over a noticeable deal-breaker area. Fixing these problems will not only enhance the way the property appears but also negate anything that looks bad about the property. This might include spots on the roof, leaky gutters, faulty heating and cooling, repainted siding, reluctant doors, and leaky faucets. Property buyers can feel the difference between cutting costs and cutting corners, so it’s best not to leave anything damaged or non-functional, especially if there’s evidence of more cosmetic renovations. One relatively inexpensive addition to increasing the appeal of your property during the maintenance phase is to install appliance hookups for white goods such as dishwashers. While you may not have all the favorite appliances, most buyers and renters do want to know that their appliances have somewhere to go and to connect to. Consider hookups for all major kitchen and laundry appliances. Make Low-Cost High-End Changes in the Kitchen and Bathrooms Low-cost changes include giving the cabinets a fresh layer of paint, which can freshen or add style to the entire space, and even redoing the countertops. For real estate investors, things like granite countertops tend to be cheaper. Someone who’s remodeling their own home will try to splurge for a high-grade, single slab granite countertop that eats up their remodeling budget in one fell swoop. However, as an investor you can recognize that granite sells itself without deeper analysis, it’s durable and it looks good even if you use less expensive tiles. Similarly, paying more for a beveled edge over a straight edge most often won’t return you more. Another way to decrease the cost of a kitchen and bath remodel is to find a cabinet system and stick with it. There is no reason to splurge on custom or even semi-custom cabinets when you’re an investor. Most home-buyers will like some bells and whistles, which you can select as stock into your system, but the expense of a full-custom job won’t merit you much return for the cost and effort. Make the Impression Impressions are an important part of ensnaring buyers and renters. This means investing in durable materials that will look good for a long time. A good coat of paint and fresh carpets go a long way toward a cosmetic renovation. The process of painting will also allow you to notice other important places for improvement. You should also think about beautiful minor touch-ups to a space, including clean hardware, such as door pulls, knobs and hinges, or attractive light fixtures. Those who plan on renting should invest in durable flooring that will continue to look good and show less wear and tear over the years. Flipping an older home may require new windows since renters and buyers know that the lack of double-paned windows can break their energy budget and detract from their overall comfort. Window style can also modernize an otherwise older looking home, giving it an interesting character with old style and new amenities where it counts. For those properties that have a yard, landscaping is a great way to invest the money, since it directly contributes to the appearance of the property, including not only what your buyer will be seeing every day but also the first and lasting impressions of neighbors and visitors as well. Remember that “low maintenance” is the watchword. Buyers don’t want to be locked into having to hire someone or rigorously maintain a difficult landscape. If you’re trying to attract renters, you might consider fencing in the backyard, particularly if you’re in a pet-friendly area, since renters won’t modify the yard themselves but will likely be looking for it. Hire the Right Help One of the biggest costs that you’ll have to consider when planning renovations for your investment properties is hiring help. Some investors prefer a more hands-off approach to property remodels, meaning they will often hire both a consultant and a general manager to inform decisions and instruct subcontractors. Other investors like to be part of the process with a more hands-on approach. Those who prefer the hands-on approach will often save costs by working as their own general contractor. Furthermore, if you’re not the decorating type yourself, it can be helpful to work with a decorator who can help you light the space and find the tricks that will make it appear large and exciting. Work in Flexible Systems Many real estate investors find it helpful to build a system or prototype for renovating properties. This keeps you from agonizing over every little choice and outcome the way a homeowner might. This could mean that you have a go-to paint and accent color that you use, as well as a set of cabinets models and countertops that you use in most of your remodels. The vision should style properties into versatile and flexible spaces that buyers and renters will see themselves in while also improving the look of the home wherever you can. Investment remodeling means making informed decisions about what renovations will give renters or buyers a quality living experience that helps your property remain competitive while also maximizing your ROI. While forming a remodeling system will be the easiest and most cost-effective approach in the long run, it’s good to keep in mind that not every renovation is required for every property that you’ll acquire. This article has been contributed by Nick Nimble. Start Your Investment Property Search! START FREE TRIAL Guest BlogsRenovations 0 FacebookTwitterGoogle +PinterestLinkedin Nick Nimble Nick Nimble has been writing about real estate trends for 4 years. He has been a regular contributor to sites talking about the newest trends in the real estate market, smart home tech and real estate in general. When he's not writing, he enjoys photography, hiking and pretty much anything outdoors. Previous Post What Are Off Market Properties? How Can You Find One? Next Post Should You Invest in Airbnb Scottsdale Properties in 2019? 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