Best Cost/Benefit Improvements?
What are the best bangs for the buck when it comes to a fix/flip?
for example, does it pay to finish a basement to add significant square footage? does it pay to replace old single pane windows? landscaping? window coverings? new kitchen cabinets, counter, appliances?
What do successfull investors expect to get back from every dollar they spend on fixing up? ex. can 10k spent wisely on improvements add value of 20k or more?
As far as a basement is considered, Unless regular windows are above ground level, any finised basement can not be considered "Livable area" however, it will add anywhere from 2500-5000 to the price. You best bet is paint, carpet, roof, windows, and maybe appliances. They will make the house look pretty. Maybe some landscaping also.
[addsig]
If you are going to be selling your fixer upper retail in a decent area you my want to get a copy of this months "Realtor" magazine. They had a big article about " Best Cost/Benefit Improvements, Best Paybacks." I did not read the article too much, but it might be able to give you some ideas to work with.
Phil
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Biggest bang for the buck is paint far and away the cheapest thing you will do that will dramatically change the condition of the house.
Second would be new carpet.
Third would be updated kitchen.
Fourth would be update bathrooms.
I would never entertain the idea of doing a thing to the roof or windows unless they were shot, missing or broken.
even if its old single pane windows? I know windows are expensive, but when i see a single pane window, i think high energy bills and im turned off immediately
Hmmm....
for me, it depends on the property. . . .
low end - new paint, flooring and taking care of glaring deferred maintenance. giv'em one WOW factor - like a great color on a accent wall.
for nicer properties, well, it depends on the property and the area. I've got a property that is a rental currently - I did a 1031 in - but at the end of the current lease, I'm going to gut the original 1963 kitchen, raise the low ceiling in the kitchen up to the roof rafters, gut an unneeded 1/2 bath, rearrange the layout, put in new cabs, granite tile counters, applicances, lighting and pantry/laundry room. Also, remove 2 windows in favor of patio doors out to the pool and views of the mountains.
That's alot, I know, but I think that the upside justifies all the work.
I traded in for $130K, should be able to get by with $15K for renovations (I'm a real scrounge) and after living in it for 2 years, sell and take my profit - paying no tax on it, since I've converted a rental to a residence. If it were fixed up today, it would sell for $210 -220.
I like to look at new model homes in different price ranges to see what the trends are, and the level of quality in different price ranges.
Best of Luck!
SWgato
I agree with The-Rehabinator line by line
cs2870- unless you are dealing with expensive houses, most of the people who are considering buying these houses will be just be happy to paying a heating bill on a house they own instead of on the apartment they are coming from. Ya know what I mean?
By all means there are houses that could warrant replacing or upgrading just about anything. But I like the first time buyer homes. You market should have sales statistics that tell you what the average price of a home sells for.
Here it is right around $250,000. So anything below that is in demand. Anything around $200,000 or below is very much in demand. A $750,000 house is on the other end of the scale. But as you can imagine the buyers for each of these ends of the market will be like night and day.
The buyer of the top end will be concerned if there is a crack in the driveway, the buyer of the lower range house will probably be more concerned that no one is selling crack in his driveway.