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#455039 - 10/20/16 08:31 AM What Rehab Projects Deliver the Highest ROI Offline

Registered: 09/20/16
Posts: 14
Loc: CA
As an investor you have to be thoughtful about how you spend your money on renovations when fixing and flipping a house. Budgets are not endless, and you do not want to risk investing more into a property than it is worth. So, it is important to hone in on projects that will add the most value for the least amount of work and cost. As part of the process, take time to research comparable homes in the neighborhood and see what amenities are common and contributing to high resale value.

Additionally, the changes you make to a property should be about updating the space not about reflecting your personal tastes. A neutral palette will create an environment where a buyer can envision how he/she can put his/her personal stamp on the property. Also, be cognizant of making adjustments that are too trendy and that may not age well. This is often referred to as stylistic depreciation, and it can unknowingly impact your bottomline.

To make sure that you get the most out of your fix and flip renovations, here are the ones that deliver the most value.

Kitchen. The kitchen is a gathering place in the home, making it a major focal point. As a result, homebuyers place a big emphasis on this room when purchasing a new home, which makes it a worthwhile investment when fixing and flipping a property. A kitchen remodel can be a costly endeavor, butcosmetic updates like refinishing surfaces, upgrading to stainless-steel appliances and installing new light fixtures can go a long way with buyers and have minimal impact on your budget. According to one study, minor kitchen remodels recoup 83.1 percent of the investment as compared to 64.9 percent for major kitchen remodels.

Bathrooms. When it comes to prioritizing rooms to refresh, the bathroom is a close second to the kitchen. In particular, buyers are most concerned with the master bathroom a facelift to this room can yield a 65.7 percent return-on-investment. But as with renovations to the kitchen, use your budget on superficial changes versus major modifications to the layout. When making updates to the bathroom, select classic features like off-white tiles and neutral paint that will appeal to a wide-range of tastes. Also, jacuzzi bathtubs that were so popular a few years ago have fallen out of favor with most buyer. So, instead of splurging on big upgrades like that use your renovation budget to replace the fixtures and the toilet, which will provide the highest yield for minimal cost.

Curb Appeal. First impressions are everything, and a potential buyer will form their opinion of a property in a matter of seconds. That said, one of the most important investments you can make is to the exterior of a home. Fortunately, there are many cost-effective ways to improve curb appeal that can have a big payoff. For one, a manicured lawn with attractive landscaping can be a low cost way to bring vibrancy to a property and can add 28 percent to the overall home value. Another way to increase the market price of a home is by cleaning its exterior. Renting a pressure washer is relatively cheap, and giving the house a good scrub down can add $10,000-15,000 to the sale price, according to one recent study. Depending on the condition of the facade more measures may need to be taken, but even costly upgrades like replacing the siding can deliver a 77 percent return-on-investment.

Energy Efficiency. Homebuyers looking for ways to decrease the amount of money being spent on utilities are increasingly prioritizing energy efficiency over luxury features. Studies have found that buyers are paying 10-14 percent more for houses with green certifications than for comparable homes without. While many energy efficiency projects take years to recoup the investment, there are some projects that will yield high returns on closing day. One remodeling magazine found that insulating an attic had the highest return of any rehab project, coming in at 117 percent. The cost of replacing windows can be a deterrent for many investors, but it is one of the most worthwhile upgrades you can make. For average-quality vinyl windows, you can recoup 80 percent of the project cost in added home value, according to a realtors study. If you are still not convinced, keep in mind that homes with sustainable features also have the added benefit of having lower holding costs.

When fixing and flipping a property, the end goal should always be about making the best looking and most functional property with the least amount of capital expenditure. Contrary to popular belief, big renovations do not always deliver the most value. Often times, minor upgrades that take little labor or financial investment can have the best payoffs. So, with a little research and a little elbow grease, you can get high returns on your next fix and flip project.

Edited by (10/20/16 08:38 AM)
Edit Reason: html code added

#455061 - 10/21/16 07:13 PM Re: What Rehab Projects Deliver the Highest ROI [Re:]
goasya Offline

Registered: 07/16/16
Posts: 59
Loc: Karnataka,India
Nice post.Thanks for sharing


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