Smart Renovations to Maximize ROI in 2025
Topics: How to Fix & Flip, House Flipping Market Insights, Property Investment Strategies, Single family rentals, House Flipping
Home Improvements That Add Value to Your Investment Property
The secret to successful real estate flipping is knowing which improvements attract buyers and enhance the value of the home.
Here are some of the win-win improvements that make buyers and investors both happy.
1. Minimize Costs By Choosing Wisely
The bones of the home, i.e. the basic framework and layout, determine the size of the rehab budget. Jonathan Faccone, Founder, Halo Homebuyers LLC, has this sage advice for flippers: “When choosing a property, look for houses that can be improved without being reconfigured.” That’s particularly true if you want a house with an open concept, or if you envision adding value by adding a bedroom or bath.
Simply put: Painting walls is cheap. Moving walls is another story. If the old adage “you make your money on the buy” is true, then finding a floorplan that works as-is yet needs some love and attention is critical.
2. Cost-Efficient Kitchen Remodeling
A nice, remodeled kitchen is a huge draw for potential buyers. One caveat: It’s easy to go overboard. If you gut an entire kitchen, a mid-range remodel can easily run up to $60,000 — and net you only a fraction of that when the time comes to sell.
It pays to make your kitchen shine when you do it cost effectively:
- Sand and paint cabinets instead of replacing them.
- If paint isn’t enough, try replacing the doors instead of demoing the cabinets
- Instead of a $4,000 stainless fridge, find a tasteful one on sale for $1,000.
Remember: Your hard money loan is generally limited up to 75% of a home’s after-repair value. Choose the remodel projects wisely.
Topics: How to Fix & Flip, House Flipping
How to Find & Keep Good Contractors for House Flipping
Your contractor can have a profound impact on almost every aspect of your real estate flip: deadlines, quality of work, budget, and return on investment. And whether the overall experience will be energizing or draining can also depend on whom you hire.
So, if you’re funding a flip, or using a hard money lender, it’s important to keep your flip on schedule and on budget. We all know that time is money. But unfortunately, not all contractors understand or care. Follow these steps and you’ll be able to find good contractors and build lasting relationships with the ones who come through for you.
Topics: How to Fix & Flip, House Flipping
How To Save On House Flipping Renovations During Coronavirus
Investing in real estate during “unprecedented times” is not for the faint of heart. Nevertheless, savvy, seasoned house flippers recognize that this change in the market presents a great opportunity to outbid and outperform the competition — if you keep moving and adhere to your budget.
Consider this your cheat sheet for saving a bit here and there while renovating during Coronavirus. Little differences in your business practices can make a big impact on your bottom line this year.
1. Don’t Stop Flipping or Renovating
The market goes up and the market goes down. It’s easy to remember when times are good, and harder to remember in the face of uncertainty, especially when your TV and social media channels skew to the negative.
But now is actually a great time to invest, provided you have an ample safety net. If you don’t already know, Residential Capital Partners formed during the 2008 housing crisis — when other lenders were closing their doors. There is no room for panic in house flipping. Invest when others doubt.
People are still buying houses. By this May, demand for housing surpassed pre-COVID-19 levels. Which means you should keep flipping with as much cash as you can muster so you can keep turning a profit. Never let a good crisis go to waste!
2. Choose the Right Property
Buy Properties in Great Locations
Coronavirus may have thrown real estate for a loop, but the golden rule still applies: location, location, location. As always, aim for homes of lesser value in neighborhoods that are seeing an increase in value.
Buy Properties That Need Minimal, High-Return Upgrades
S
ome experienced house flippers pride themselves on snapping up houses that need
a lot
of elbow grease. Forget that strategy for now. Why? You’re on Corona-time. Which means paperwork and coordinating with contractors will take longer. Store hours are affected. Materials may be on backorder. The project will lag on too long for you to get a great return.
What will get you a better return is updating your kitchens and bathrooms. According to US News, low-end kitchen remodeling in the United States starts at just $4,000. The starting cost of a low-end bathroom makeover is $6,000. That’s pennies compared to large overhaul projects, like wood flooring, a second story or other additions to square footage.
Salvage what you can to keep the character of the home – and save yourself some cash. Opt to paint out-of-date cabinetry, instead of installing new cabinets. See if you can keep existing tile, and replace the toilet, sink, and hardware. Our rule of thumb: low to moderate repairs wins every time!
Topics: How to Fix & Flip, COVID-19, House Flipping