Making a house as attractive or stylish as possible is not the only goal of house flipping. It's about making the biggest return possible on each property -- just like real estate.
Although the rehabilitation costs of a distressed home may be covered by your fix-and-flip or bridge loan, funding is not the same as free money. One of the most important skills to have while learning how to flip a house is knowing how to use your renovation budget wisely. Performing the greatest house improvements at the lowest possible cost to optimize the home's worth should be the main goal.
Organizing Your Home Improvements
Research and prepare before pulling apart a property to restore. Check local housing prices to see what buyers would pay and ROI. Therefore, check local home valuations and sales. After understanding the local real estate market, you must have home improvements. Work with a Realtor who knows your neighborhood to make wise renovation decisions.
What Home Improvements Should Be Done First?
Whether you're doing a major or minor project, these seven home improvements will increase your property's value.
- Upgrade The Kitchen For The Greatest Value
Kitchens are vital for real estate investors trying to increase property value. It holds particular areas in people's hearts—a warm, inviting kitchen calls to us on some level.
Fully Renovated: Consider whether the floor plan is modern or efficient before removing all cabinets and fixtures in a complete renovation. Before buying granite or marble counters, try quartz or synthetic stones.
Specific Updates: Kitchen renovation ROI may be low. Consider darker stainless steel for a bolder design. Compare appliances with "provable" efficiency claims. A kitchen with old but serviceable cabinetry can be revived with paint.
- Bathroom Finishes, Fixtures, And Efficiency
Bathrooms show age second only to kitchens, and they always figure on lists of the most valuable home improvements.
Fully Renovated: Installing water-efficient and space-saving sinks and toilets can free up a room. Replace linoleum with sharper flooring to improve. Replacing the shower tile and tub can brighten a dull bathroom.
Specific Updates: Upgrade faucets, knobs, and other sink and bathroom fixtures. Another inexpensive upgrade that may transform a bathroom is cabinetry hardware. Home improvements can be cost-effective without a sophisticated updated floor plan or flashy installations.
- New Flooring And Paint May Increase A Home's Value
Updates like new paint and flooring may seem simple, but they can increase your home value. The most significant effects are sometimes achieved with the simplest upgrades.
Fully Renovated: Some older homes have carpet and aged flooring. Wood is attractive, but you have other options. Bamboo flooring costs less and looks identical. Painting the whole house may renew it.
Specific Updates: Consider installing carpeting instead of hardwood or bamboo flooring in the upper level of your home if you conclude that new flooring is required.
- Smart Landscaping Improves Curb Appeal
It's essential to make an excellent first impression. The most valuable house upgrades are not limited to the home itself; they extend beyond the home itself.
Fully Renovated: The house's exterior ought to have a spotless appearance. It can be wise to spend money on complete landscaping, which includes lush green lawns and mulched gardens. Remove dead grass with resodding to add greenery.
Specific Updates: The entrance door can look cozy and welcoming with potted plants. Although maintained with few gardens, the backyard should be pleasant and constantly mowed. Design the front yard to draw people to the house. The backyard is just a starting place for the new homeowner to design their ideal yard.
- Use Strategic Lighting
One of the simplest ways to increase the value of your home on a tight budget is to replace the lighting fixtures in your house.
Fully Renovated: An elegant look can be achieved with recessed lighting. It makes a good buzzword for selling the property. Dimmer switches, which are inexpensive and easy to install, provide elegance. Always turn off the room's breaker before touching cords.
Specific Updates: Wattage and color temperature matter when replacing bulbs. A cooler bathroom can look clean with warmer kitchen and living room colors. Your flip may sell for more with minor stylistic changes that complement the home's style and the buyer's market.
- Energy Efficiency Supports Higher Costs
The ability to impress buyers with accurate data is a significant benefit of energy-efficient upgrades. It will show them how better your property is than others.
Fully Renovated: Renovations should begin with new insulation. Average houses lose energy from a three-foot-square hole in the wall. Updating windows can also improve energy efficiency.
Specific Updates: Use LEDS in your home or advanced technology to turn your property into a smart home. This helps promote energy efficiency, lifetime, and electricity bill savings to buyers. Start with rebates and free energy audits—there are many government-funded energy efficiency programs to boost house value on a budget.
- Expand The Living Space
An expansion will never be a first step when flipping a home. Additions increase livable space but rarely return on investment.
Fully Renovated: Check out surrounding homes that have added extensions before hiring an architect. You can assess the cost-to-return ratio by looking at local sales to evaluate if the extension is worth it. Knowing how an extension will influence your budget from the start is crucial.
Specific Updates: With prefabricated outbuildings, installation is cheaper than ever. Increasing living space to welcome guests, rent on Airbnb, or store products is a significant house improvement, but it's expensive. Consult your realtor to verify a check that covers more than expenses.
Conclusion
Expert house flippers and rental property investors may assess a distressed property and determine what modifications yield the highest profits and how much to flip it for. First-time flippers should engage an experienced general contractor to manage repairs, but get multiple quotations and don't overdo it.