A primary way you can lose profit on your flip project is by over-renovating. Over time, you’ll learn how to best walk the line between renovating enough and not too much.
Think strategically to ensure you’re renovating what needs to be done without overdoing it. It’s a balance with an end goal of attracting the most potential buyers.
There are eight main areas to consider when planning your renovations. I’m going to break down these eight things and discuss when and how a renovation is worth it, and what to avoid to ensure you’re not overspending.
Most of us know the importance of an updated, functional kitchen. There is no doubt you can make some changes in the kitchen that will elevate your flip, but where should you draw the line?
Ask yourself: Does the property need a whole new kitchen, or will updating it do the trick? This is a chance to save money since an overhaul of an entire kitchen can get pricey.
If a renovation is in order, here are some suggestions to avoid breaking the bank.
- Instead of choosing the most expensive countertops, opt for a lower-price option like quartz.
- If the cabinets are in good shape, no need to tear them down. Freshen them up with new paint or stain and save some money there.
- When making changes like switching out appliances, go for what you know buyers love. Instead of blindly choosing the most expensive, look at comps and what buyers are looking for, and choose those things. Energy-efficient appliances are a huge plus to buyers.
When making changes to a kitchen, keep in mind it can make or break a sale. Updating may be enough to get buyer’s attention, and when going forward with a big renovation, focus on what brings value.
In the buyer’s eyes, a new bathroom is not far behind a renovated kitchen. Clean, roomy, functional bathrooms are a main selling point in just about any property. Similar to the kitchen, you can get away with updates most of the time instead of bringing it down to the studs.
If you are confident in the basics of the bathrooms, there are some ways to get the most out of small changes.
Here are some examples of how you can choose between renovation options to save money while still increasing value:
- Update a shower door instead of the entire shower.
- Keep the existing tile but change the countertop.
- Grab a new toilet.
Think about safety, functionality, and a fresh feel for your bathrooms.
Paint (Walls, ceilings, and trim)
A simple, affordable way to give the property an instant facelift is fresh paint. I don’t just mean painting the primary suite or the living room walls. Make the time to get a fresh coat of paint everywhere, from walls to ceilings and trim.
Another way to elevate your home with paint is by painting the kitchen island or the front door. If you bring new paint to these areas, you can impress buyers with a contrasting color to make it pop.
When painting living spaces, it’s best to choose a neutral color for walls so buyers can easily imagine themselves and their furniture in the rooms.
New flooring can have a huge impact on your amount of offers and offer amount. It’s been shown that homes with new flooring get more offers and not only will old flooring get lower offers, but buyers will reconsider the property altogether.
Think about the buyer you’re targeting to make decisions moving forward with your flooring. If you’re in a high-end area, you’ll need to meet expectations with high-end flooring. Similarly, at a lower price point, a less expensive flooring will do just fine.
The bottom line is that flooring takes a lot of wear and tear. There is only so much a good cleaning can do, so frequently, the benefit outweighs the risk of changing your flooring. Know your market, and go with your gut.
Curb appeal is an unsung hero. Without good curb appeal, you won’t get as many potential buyers. Use the front of the home to show a sneak peek of what they can expect inside and include what buyers like to get their attention before they even step foot in the home.
Here are some great ways to improve curb appeal and, in turn, get potential buyers through the door:
- Make any repairs needed.
- Powerwash the siding, clean the windows and paint if needed.
- Replace hardware like door knobs.
- Install or replace outdoor lighting.
- Landscape and add flowers and plants.
- Update the mailbox.
The above are quick, easy, and affordable ways to renovate without spending too much. Don’t skip this step!
If a property has unfinished spaces like a basement, attic, or garage, there is much opportunity for ROI. While the cost upfront may seem steep, it’s up to you to make room in the budget and choose to finish these spaces to increase value.
More living space or storage are bonuses for buyers. Plus, more square footage goes toward a higher selling price. We’re talking about avoiding over-renovating here, but it’s always a case-by-case basis where you must determine if finishing a space will make a big enough impact.
Instead of saving your renovation budget, save it elsewhere and use it to renovate unfinished spaces!
Big Items (Roof, windows, siding, and mechanicals)
You can renovate all you want, but skipping the big items will cost you. If you have a specific budget for your flip renovations, start here. Before mentally spending your budget on full renovations of kitchens and bathrooms, be sure you don’t have a “must do” elsewhere.
Some of the big items that are worth the money to renovate are: Roof, windows, siding, and mechanicals. These things can cost a modest amount or take out a chunk of your budget.
These big items don’t have to be in horrible shape for you to make them a priority. A new roof or windows can make a huge difference to buyers and will add value.
Finally, should you change the lighting in your flip? Lighting is a simple way to instantly add appeal to any room. Updated light fixtures can have a few different effects.
First, fixtures change all the time, and swapping light fixtures can quickly modernize a room. Lighting has the potential to improve aesthetics as well as performance.
Secondly, lighting brings light! Natural light is always best, but offering enough light in each room is a plus for buyers. Nobody likes a dark kitchen or living room.
Lighting is also an opportunity to tap into specific types of buyers. Energy-efficient lighting appeals to environmentally conscious buyers. Smart lights appeal to the techy buyer. And any new lighting will appeal to a buyer for the simple fact that new fixtures elevate a space.
Spend when You Need to
Don’t forget to think of these things far before you’ve made your purchase. You can only see so much when you’re walking through a potential property, so keep money in the budget for the renovations that are non-negotiable. And a final note, think critically about which of the above eight can be done to save elsewhere. For example, could a dark-colored bathroom stay when new lighting is put in? How about holding a complete demolition and adding living space in unfinished areas?
Renovating is half the battle in a flip, but you’ll master it in no time.
Ready to take that next step when it comes to flipping?
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