Flipping a House? These Renovations Won’t Pay for Themselves
If you’re handy and motivated, flipping a house can be a great way to scratch a design itch and make good money.
But as with any financial endeavor, you’ll need to watch out for costly pitfalls along the way.
Making the right choices for your flip — the ones that will give you a return on your investment — will depend on the home’s size and condition, as well as the local market and comparable sales in the area.
Some upgrades, like unique light fixtures and sophisticated landscaping, may not make financial sense if you’re planning to sell the home immediately.
If you’re considering buying a fixer-upper to renovate and sell, here are a few ideas to keep in mind.
Beware of the Bathroom
Flippers often fail when they go wild on a bathroom renovations. Keep these ideas in mind when you’re deciding if and how to take on a bathroom renovation:
● Cost. Utility and material costs can make bathrooms an unexpected money pit. The price tag for an average bathroom renovation is around $10,000, though some high-end remodels can run over $20,000. If your home has water damage or other structural problems, a full renovation may be necessary. If the bathrooms are functional but dated, look for inexpensive upgrades that can give the room an easy facelift.
● Personal Style. Before you pour thousands of dollars into creating your dream bathroom, keep in mind that everyone has their own dream. If you choose hand-painted tile and heated floors for your master bath remodel, you may not see a return on your investment. Stick to neutrals and let potential buyers imagine their own tweaks and unique style.
● Practicality. Think twice before replacing a home’s only bathtub with a shower. A house without a bathtub can be a deal breaker for families with children, a group that makes up nearly halfof all homebuyers.
Small Choices Add Up
Installing a kitchen worthy of a professional chef is an easy way to lose control of your budget, but sometimes smaller expenses can be to blame as well. Here are a few other areas where renovators lose money:
● Lighting and hardware. Because every homebuyer has their own taste, opt for simple, clean choices. Don’t spend $500 on a designer fan when a $150 fan will do the job.
● Plumbing. Over-the-stove pot fillers that let you fill your cookware with water, and complex showerheads may seem like a good idea, but they’re pricey and they don’t add much value to the home.
● Flooring: When you see a dirty, dull wood floor, many flippers may be tempted to tear it out and lay down new flooring. If the wood has water damage or significant warping, replacement may be the best move, but don’t underestimate a good sanding. By renting a sander, you can refinish the existing floors. You’ll save money, preserve the home’s character, and avoid throwing away perfectly good wood floors.
For Flips, Luxury May Not Pay
Here’s a gentle word of caution: don’t fall prey to higher-end items in general. Luxury items could include:
● Unique designer tile or flooring
● A wine cellar fit for a sommelier
● A heated swimming pool
When it comes to a flip, simple may be the best choice. Opt for lower-cost materials with a clean look to appeal to a wider variety of potential buyers. Fancy fixtures might be alluring, but styling a flip too specifically to your own tastes can make it a turnoff to others.
Consider how much time, energy and money you’re going to spend on a renovation and try to stay within those guidelines. This isn’t your forever home; it’s an investment.
Make choices that will add value to the property for resale — and when in doubt, keep it simple.
Serena Miller is an Atlanta real estate agent for Owners.com, where the process of buying and selling your home is made simple. When she’s not working tirelessly for her clients, Serena tries new restaurants and travels with her two adult daughters. She also takes care of her home by tackling home improvement projects like tiling and painting.
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