As you plan your next flip, it’s critical to know what upgrades increase home value. The world looks a lot different in 2023 than it did even a year ago, with house valuations changing and would-be buyers commanding more control and demanding optimal value for their purchase.
We’ll take a look at some home improvements that often add value, taking into account recent trends as well as tried-and-true tips for home flippers.
To make the most of your renovation project and realize the highest return for your investment of time and money, there are some fixes and improvements that far outweigh the others. You’ll want to factor in which updates you can tackle to maximize the resale value and those that are just not worth it.
There will of course be some items on your list of improvements you cannot avoid, including anything that is needed to bring the home into a livable state and meet required codes. These items can include large-ticket efforts such as ensuring a roof that doesn’t leak, has a suitable HVAC system and there are no insect or rodent infestations.
Simple but necessary updates such as CO2 and smoke detectors throughout the home must also be on the punch list. However, if you try to tackle every possible upgrade—even in relatively newer homes—you will likely find an endless list of items to address that could be insurmountable.
One of the biggest impacts comes from adding living space. While this sounds simple, structural additions to a home can be time-consuming and costly, especially if not included in your original rehab plans.
The advent of so many remote workers should also be something to consider. Adding a dedicated space for a home office can really tip the scales for sellers. In some cases, converting a walk-in closet into a functioning office space will do the trick.
Creating an open floor plan, where walls and doors can be removed or reconfigured to optically increase the space without increasing the square footage can also increase the appeal and value to would-be home buyers.
However, if there is an option to finish a basement, an area above a garage, or even enclose a screened patio, flippers can see returns of up to 75% above their investment.
Before starting a house flip, it’s important to identify what improvements are in scope and will have budget allocated and those that will not. While there may be overruns of cost and or time, it’s advisable to ‘plan your work and work your plan.’
We’ve all learned that kitchens and bathroom upgrades command a significant return if done properly, but caution should be taken to avoid overdoing it in comparison to the whole home.
A simple beach bungalow often won’t see the same return on newly installed marble countertops and high-end appliances as would be earned in an upscale suburban neighborhood. In some cases, simply updating the faucets and fixtures is enough to entice buyer interest.
Floors in poor condition will need to be addressed, but in many cases, laminate hardwood or luxury vinyl plank (LVP) is a cost-efficient, easy-to-install upgrade that holds value in resale.
Walls, interior and exterior, should have a fresh coat of paint in a neutral tone. In some cases, replacing interior doors and adding trim such as crown molding will enhance a room without much-added expense.
Curb appeal and outdoor spaces should not be excluded from your attention. Not only is the exterior the first thing potential buyers see, but it also sets the tone for the available property.
Everything from trimming back overgrown trees, replacing older mailboxes, and cleaning the walkways will all add inexpensive, high-impact fixes. Installing shutters on the front of the home, replacing old and dented garage doors, and adding outdoor lighting, can all dramatically improve the approach to the house.
Experienced flippers have followed the previous suggestions for decades and seen greatly improved ROI for the flips.
However, some items previously considered less valuable fixes are now ascending buyers’ wish lists and reducing days on the market, including eco-friendly features (such as low-flow toilets, and energy-efficient appliances and windows), smart home components (thermostats, lights, keyless entry, doorbells, etc.), and strong wi-fi (and/or available ethernet ports).
Evolving as a temporary solution, stay-cations have fortified homeowners’ interest in enjoying their own private outdoor spaces. Whether a deck, an outdoor kitchen or barbecue patio, or a firepit—or better yet, an outdoor fireplace—consider the appeal a personal retreat adds to your investment property.
As recent demand has dramatically increased both the wait and costs to install a new pool, the viability of adding one in your next flip is minimal.
It may sound simple to stay focused on high-impact improvements, but even the most experienced flippers can get caught up in adding to the punch list, adding to the costs, and not bearing in mind the return on investment. It’s vital to remember, a renovation for sale is an economic process.
Personal taste will certainly affect some design elements but should not override what will deliver a strong return on investment nor should they derail the timeline to completion. It’s not about imposing your personal style on buyers but getting a house prepared for sale that appeals to buyers who value and are willing to pay for the improvements you’ve made to the home.
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