Renovations That Increase a Property’s Value
As an investor flipping a home, renovations are undoubtedly top-of-mind. If you’ve purchased a run-down home – perhaps following that old adage of buying the worst house on the best street – then you probably have a long wish list of improvements you’d like to make. However, maintaining a realistic budget is vital, so it’s important to know which kind of renovations will pay for themselves and add value to your property so you don’t get stuck with an expensive home that won’t return a profit.
First off, make sure you’ve got the basics down. A home needs a roof that won’t leak, solid floors and walls, reliable mechanical systems, functioning plumbing, and a dry basement. These types of features and fixes are expected by buyers, and while they don’t always have to be upgraded, they should be in good working order. Depending on the neighborhood and the property itself, other amenities, like a certain number of bedrooms or bathrooms, could also be considered part of the basics. The basics don’t really add value but they’re important for ensuring the value of the property is comparable to other homes in the neighborhood. Keeping in line with neighboring houses is also a good strategy, as you don’t want to over-improve the property and make so many upgrades that you lose money or risk deterring buyers.
First impressions are critical! Landscaping and a house’s exterior need to look to great to attract buyers. While curb appeal doesn’t add much to a home’s value, an attractive exterior helps it sell faster. What kind of tasks can you take on to enhance your home’s curb appeal? Keep it simple. Clean, simple landscaping, a neat lawn, and fresh paint go a long way. Consider a new outside light fixture, new address numbers, and potted flowers. One element that can add to both curb appeal and value? A new front door, which is considered to be an excellent investment.
There are plenty of aesthetic upgrades to be made inside a home as well. Freshly painted walls, professionally cleaned carpets and new fixtures are just a few features that can enhance a potential buyer’s perspective. Make sure you don’t incorporate any bold looks, though. Keep your design choices subtle and tasteful, so buyers aren’t turned off.
Taking advantage of existing square footage by turning it into usable space is a fantastic way to add value to your property. Consider turning an unimproved basement space into a finished room. Playrooms, TV rooms, office space, and mother-in-law suites are great uses of a finished basement. While the cost of such a project is significant, in most areas of the country a finished basement will give you a 70 to 75 percent return on your investment. This could even be higher in areas like Portland, where basements are rare but in high demand.
While open concept homes have been popular for a few decades, they seem to be finally going out of style. Lacking separation between the kitchen, living room, and dining room, open concept designs were originally appreciated for their ability to foster parties and gatherings. Now they’re increasingly thought to be inconvenient, noisy, and hard to clean. So before you start knocking out walls, make sure you know what buyers in your area want and don’t commit to a risky trend. Even without open concept, there are ways to create spaces that welcome and encourage gatherings. Whether kitchen islands, cozy seating areas, fireplaces, or a great patio deck, there are plenty of design options that can help potential buyers envision themselves celebrating holidays and hosting parties.
Accessory Dwelling Units (ADUs)
ADUs are the perfect opportunity for increasing income. In today’s uncertain world, many homeowners are looking to shore up additional options for supplementing their income. Small homes built in backyards, ADUs can be used for short-term rentals and long-term rentals. With affordable rental spaces in short supply, especially in Portland, ADUs are in high demand. ADUs are also often valued for the ability to provide extra housing for existing family members or for aging parents.
Questions? Seeking a lender for your flip? AIC is always seeking quality loan requests. Contact us today at 541.343.9714!Home Renovations, House Flipping
Categories: Fix & Flip