House Flipping: Here’s What You Should Renovate For The Highest Return
May 25, 2017 : Erin Vaughan
Get in, and get out—it’s a house flipping mantra. But depending on the condition of the property you buy, you’re probably going to have to make some serious improvements first. And choosing your renovations can be worth its weight in gold if you play your cards right.
House flippers can earn their dollars back, but only when they choose projects that fit both their budget and buyers’ tastes. For example, tacking on a $10,000 garage onto a $150,000 house would be an unwise choice. It’s also easy for new investors to take the value of certain renovations for granted. Many new home flippers expect their investment to be as a simple ratio of what they spend: the more they invest on repairs, the more they stand to earn on resale.
But the cost-versus-value of various home improvement projects is not always as clear-cut as it seems. For instance, adding attic insulation—which costs $1,343 according to the national average—has twice the return of a bathroom addition. Yet, insulation installation is about 3% of the price of that brand new bathroom. That’s why it pays to know your average return when you’re remodeling. Here are four projects that are worth every penny you’ll spend on them.
1 – Add Attic Insulation for a Lucrative Premium on Your Sale Price
There’s a reason attic insulation has topped cost-versus-value reports for years. According to The U.S. Department of Energy, adding insulation—along with air sealing—shaves an average of 15% off a homeowner’s energy bill. For most families, it translates to hundreds of dollars in recouped heating and cooling costs. And that savings make homes more attractive when they go on the market. A survey conducted by The National Association of Home Buyers revealed almost 90% of home shoppers consider energy efficiency a top feature. Other studies show energy efficient homes sell for an 8 % premium—so you can definitely get some green back on your green improvements.
2 – Don’t Forget to Take Your Primping Outside
House flipping newbies spend too much time fixing up a property’s interior and forget to channel the same energy in outdoor improvements. But landscaping counts big when it comes to curb appeal. After all, the front yard is the first thing most homeowners see when they come to an open house. Polished landscaping design can boost home sales by 20% or more and it’s something that can be done without breaking the bank. Hardscaping features like stone walkways and patios, are easy to maintain and will appeal to trendy, upscale home buyers. A fire pit with stone seating is another low-cost option. Outdoor areas like these allow home shoppers to project themselves into the space, imagining future get-togethers with friends under the stars. Remember, it’s about selling a lifestyle as much as a home!
3 – It’s All About Making a Grand Entrance
An entry door replacement also lands you high returns for every dollar spent. At a 90% cost-value ratio, it’s one of the most valuable renovations you can make. The beauty of this project is how simple it is, especially when you consider the impression that a standout door makes on anyone turning the knob. Like the cherry on a sundae, an entry doorway in rust red, slate blue, or cheerful yellow ensure you knock that first impression right out of the park. Replacing a flimsy and outdated door with an ENERGY STAR rated one will net the next homeowner utility savings as well. Beautiful and energy efficient? Who could say no to that!
4 – Energy Efficient Windows Have Appeal and Savings in Spades
If you’re watching trends, you know that open planned homes are where it’s at these days. Buyers are looking for spaces with light and openness, especially those from younger demographics. Experts advise that an open floor plans are at the top of first-time millennial home buyers’ lists. But it’s not always possible to get the look without knocking out a wall or two. (If you’re thinking about doing that, don’t! It’s both expensive and could threaten the structural integrity of the house). One way to add lightness to cramped interiors is to opt for a fashionable window replacement. Try swapping out a set of double-hung windows for a large picture or sliding window. Or convert a solid interior door to one fitted with glass. And if you want to talk up your improvements, invest in efficient glazing or argon insulation. The resulting increased daylight and lower utility bills will do the selling for you. All you’ll have to do is sit back and wait for the chickens to come home to roost!