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4 Types of Renovations That Are Better Left Undone

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Choose what to include or not to include Working range As important as Choose the right contractor.. Some work is obviously required (for example, repainting a tired house), but other upgrades are more selective. And when it comes to selective work, there are some improvements that are worth your money, and most certainly not others.

Regarding the rehabilitation of investment real estate, the important things to add to the “Don’t Thou” list are:

1. Repairs with a generally low rate of return on investment

In 2003, the US Open Association Survey For properties that increase or decrease the price of a new home (assuming all other properties, square feet, remain the same). The ones found are:

  • Full bathroom: 23% increase
  • Partial bathroom: 15% increase
  • Garage: 13% increase
  • Central air conditioner: 12% increase
  • Fireplace: 12% increase
  • Basement: 9% increase
  • Close to golf course: 8% increase
  • Higher ceiling (9 feet): 6% increase
  • Additional bedroom: 4% increase
  • Laundry: 2% increase
  • Ground pool: 0% increase
  • Inlow Sweet: 5% reduction
  • Professional office: 5% reduction

One of the fireplaces sounds unbelievable to me, but the other fireplaces seem almost reasonable. Some of these properties will have different effects in distinctly different areas. So, for example, a garage in a city with a high walk score may not be as valuable as a city with a low walk score. Basements in areas with high groundwater levels and frequent floods are not particularly desirable. Central A / C is much more valuable in places like Birmingham, Alabama than San Diego, California.

That said, some refurbishments are almost always a bad idea. The suite in law and the specialized office will be two of them. The other is to turn the garage into a bedroom. CostAdvisor.com costs the average garage conversion across the country $ 11,154.. I think it’s expensive, but it’s still quite expensive (for example, many garages aren’t insulated, especially to do it right). The problem is that I’m losing something (garage) for a fair price to get another bedroom. It may be worth adding a bedroom to move from one bedroom to two or two to three (usually the smallest bedroom the family thinks). Unless the house is very large, it’s rarely worth doing so on top of three bedrooms.

Related: Top 5 items to redeem or upgrade on all rental properties you buy

Like most, there are some exceptions. Most notable is the dormitory rented out of the bedroom. In that case, the more bedrooms you have, the higher the rent. So it makes sense to find a corner or grandma that can be transformed into a bedroom. But in general, adding more than three bedrooms is not worth the cost.

2. Modify properties too well

Another common mistake investors make is to over-repair real estate. If you’re repairing a luxury home to turn over, you need to get everything out. But most rents, especially working and middle class rents, don’t need anything nearby. They need to be nice and functional, not stunning. Of course, it is important not to use clumsy materials. Builders grade carpets rarely last for more than a turn. Good luck if you use flat paint. However, you don’t have to do all of the following:

  • High-end stainless steel appliances
  • Custom cabinet
  • Granite slav countertop
  • bay window
  • Elaborate crown molding
  • Expensive chandelier

My brother says he will buy the second cheapest item in the store. In his theory, the cheapest is junk, but the second cheapest (well, the cheapest) is at least solid, if not flashy. I don’t fully accept this theory, but it’s a good place to start. High-end materials do not add much rental or resale value to mid-sized properties. They are just not worth the cost. However, cheap materials quickly break and need to be replaced. Inexpensive materials are also otherwise not worth the cost. Aim for the “Goldilocks Zone”.

3. Troublesome additions or upgrades that don’t fit the property

I have seen some strange repairs on my day. (Check my list Top 10 DIY catastrophes As proof of that. ) In most cases, it’s generally best to avoid adding extras to your home. Also, finishing the basement is rarely worth it. I lost sight of the number of “finished” basements I walked on, either full of mold or torn in the lower half of the drywall due to flood problems. That said, if you go either route, be sure to get permission and use a good contractor.

Other upgrades may seem worthwhile on the surface, but they aren’t. I saw a lot of “additional bedrooms” that can only be accessed from another bedroom. This does not count as a bedroom (legally or otherwise). Some additional bedrooms are so small that serious people don’t consider it one. (Bedrooms should be at least 100 square feet.) Counting these rooms as “bedrooms” can be disappointing, rented or sold by potential buyers or renters when they actually see them. Will be lower.

You also need to ask yourself, “What would you like if you lived here?” So, for example, if you have a large high-rise house with no bathroom downstairs, adding a half-bathroom is almost certainly what you want. Who has to go upstairs every time nature calls? On the other hand, if you have a high-rise house with all bedrooms on the second floor and a half-bathroom downstairs, you may want to make that half-bathroom a full-bathroom. but why? People generally do not take a shower on a floor separate from the bedroom unless they need to.

If your house has a dingy basement and there is laundry there, it is worth trying to bring it upstairs. If the basement is dry and complete, you can leave it in the basement. Again, I’m not a fan of garage mods, but if you’re considering a garage mod, you should consider whether your home still has storage. If your house doesn’t have a basement or hut, remodeling your garage will almost eliminate the storage space your house once had. Nowadays people have a lot of things and need a place to put them.

Related: 7 Ways to Spend $ 5,000 Refurbishment Budget on Maximum ROI

Therefore, ask yourself these questions and summarize your scope of work based on the answers.

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4. Upgrades, which are mostly headaches

Some items are great, but usually a headache, especially when renting. Skylights look great, but they are famous for leaking when it rains. We do not recommend including them unless you are dealing with luxury properties. Swimming pools also generally fall into that category.

As mentioned above, a survey by the American Association of Real Estate Agents found that adding a pool would increase the selling price by a whopping zero percent. And adding a pool is not cheap. CostAdvisor.com (I think this is also high) has a national average $ 49,500!! In addition, if you are renting a property, there are many strict legal and liability issues regarding pools these days.

That said, there are, of course, some exceptions. When I was in Scottsdale some time ago, literally every house had a pool. From time to time, customers in a particular region expect to have it. In such cases, it makes sense to put one, but usually it’s not.

Conclusion

You can make money by making a purchase, but you can lose it at any stage of the process. And the most common place for investors to turn good deals into bad deals is failed rehabilitation. Finding good contractors and managing them well is essential. However, it is also essential to put together an appropriate range of work. And the right range of work is good not only for what’s in it, but also for what it excludes.

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What would you like to add to this list? Do you agree with any of the above?

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