Lessons from the Pros

Real Estate

Should I Renovate, Remodel, or Renew?

Over the years one of the biggest mistakes I have seen flippers make is to fall in love with a project. This mean they often go over budget.

For some the process seams daunting and for others it’s a piece of cake.  If you ever watch shows like HGTV’s Design on a Dime you know that if you have a budget ($1000 is the budget on the show) and some creative ideas you can make a room (or a house) pop and be desirable.

I’m good at setting the budget and sticking to it. What I’m not good at is the creative ways to solve design issues.  I have learned some tricks of the trade along the way, so I thought in this piece I’d share some with you. I’d also like to open up a dialog so that if you have any great ideas they can be shared.

Here is a great tool for identifying where you get the greatest return on your investment.  http://www.remodeling.hw.net/cost-vs-value/2014/

Exterior projects: According to the 2014 Cost vs Value Report (which compares construction costs with resale value) exterior projects – have the highest cost-value ratio (Here we use Atlanta as an example).

  • Entry door replacement (even repainting) cost recouped 70.8-96.6 %
  • Garage Door replacement – cost recouped 99%
  • Deck Addition – cost recouped 117%

Here are some exterior projects that will cost very little and enhance curb appeal and attract buyers:

  • Make sure all trim is well painted
  • Trim all landscaping and trees
  • A simple water feature
  • Make sure all windows have screens
  • NO clutter in front, a nice lighting feature, no peeling paint, clean and fix gutters, power wash the exterior, make sure hardware is fresh and not worn looking, THE FRONT DOOR is key.
  • You want to avoid clutter but make the entry inviting so, if there is room, add potted flowers (must keep them alive).  I know this sounds simple but have three to four people stand at the front door and see how that feels. That is what your potential buyer will do.  They often stand at the front or front door while their realtor gives them an intro to the property.

Interior projects: According to the 2014 Cost vs Value Report Interior projects.

  • Kitchen remodels only add 75-79% back to value –BUT they help a property sell faster
  • Attic Bedroom 84.8%
  • Basement remodel 83.4%
  • Lowest project recovery – Home Office -42%

Here are some low cost ideas that will help wow potential buyers and sell the property quicker:

  • Nothing transforms a room faster than paint – dollar for dollar you can’t beat it. There are some good one cover paints today.
  • Bathrooms: new fixtures, tub refinished, new shower curtain
  • New area rugs – can liven up a space
  • Lighting – buyers like built in lighting but no one likes wires.  There are now Wall Mounted Sconces that are battery operated.  They give that custom feel for only $40 dollars each and no electrician.
  • Sounds simple but making sure the windows are clean and what is seen out of them is appealing – bring the outside in.  Even if you have to put a potted plant in front of the window.
  • Kitchen Cabinets– wash, refinish or paint.  New hardware is also an inexpensive way to upgrade the cabinets (but only if they look fresh).  There is a kit from Rust-Oleum called Transformations that can help you affordably redo your kitchen cabinets.
  • Kitchen Appliances – this can be expensive, however if you go to a “scratch-and-dent” store you can get substantial discounts and often the flaws won’t be seen or affect the appliance.

These are a few ideas – feel free to share yours.

Great Fortune,

Diana Hill

DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.

Join over 170,000 Lessons from the Pros readers. Get new articles delivered to your inbox weekly.