The right upgrades can add thousands of dollars to the value of your fix-and-flip home and make your property a magnet for potential buyers. The key to realizing the value from upgrades is making home improvements that hold universal appeal for buyers.
An extensive upgrade should not commence, of course, until all basic repairs that the house needs have been done. Home buyers won’t be interested in your modernized kitchen or like-new bathroom if the furnace is broken, the roof is leaking or the windows are cracked and drafty. After these necessary fixes are made, you can turn your attention to upgrades that will make your fix-and-flip property stand out.
Two upgrades that provide the best ROI for your buck are fresh paint and a professional carpet cleaning. In order to appeal to the largest number of potential home buyers, it’s best to keep the paint colors neutral. Gray and beige are available in many different shades and are very popular with home buyers right now. Also don’t forget to paint the ceilings. It’s usually not a worthwhile investment to replace carpet throughout unless it is extremely worn or a glaring color. If the carpet is showing slight wear, strategically placed area rugs can help create a modern polished look.
The five upgrades described below have been ranked by Remodeling magazine as providing the best ROI for home sellers.
A spacious updated kitchen with new cabinets and modern energy-efficient appliances will help sell a home to many buyers. If your kitchen budget is modest, you can greatly improve the appearance of an older kitchen with new paint, refaced cabinets and a new sink and faucet. There are services that will remove cabinet doors and drawers, refinish cabinet boxes and then add brand-new doors and drawers at a much lower price than new cabinets. If the cabinets are of good quality and in reasonably good shape, a fresh coat of paint or re-staining can provide an inexpensive facelift. Appliances can be given a fresh look by ordering new doors or face panels from the manufacturer.
For higher-end homes, a complete kitchen remodeling may be desirable. According to Remodeling magazine, the average cost nationally for a kitchen remodeling that includes new paint and trim, cabinet refacing, new countertops and flooring, and a new sink and faucet is less than $19,000. With ROI averaging around 79%, kitchen remodeling is often a worthwhile investment for making your property stand out.
Installing a backsplash is not especially difficult for do-it-yourselfers and can pay off with a higher sales price. An analysis by Zillow found that home listings that advertise subway tile backsplashes fetched on average 6.9% more than the expected sale price. Installing granite countertops can also provide an attractive payoff. Zillow reported that home listings that mentioned granite countertops in the listing sold for 4.1 percent more than the expected price. Also, the type of cabinets can make a difference. Listings that mentioned Shaker cabinets sold at nearly 10% above the expected price, according to Zillow.
A bathroom that needs a simple facelift can be refreshed with new paint and lighting, new caulking around the tub and shower and new faucets. You should also consider upgrading the vanity with a granite or marble top. According to the Remodeling Expense website, you can expect to pay approximately $50 to $60 per square foot for a good-quality marble vanity top.
Remodeling magazine estimates the average cost for a bathroom remodeling that includes fresh paint and flooring and new vanity, tub, toilet and faucets at approximately $17,000. The average ROI on bathroom remodeling is 70%.
For a less expensive upgrade, consider simple fixes such as a new toilet seat or re-grouting the tub and/or shower. If the tub is grungy-looking but you don’t want to replace it, consider investing in a prefabricated tub and shower surround. According to ImproveNet, the average cost of a professionally installed tub and shower surround is $2,500. This usually works out to less than the cost of retiling walls and installing a new tub.
The old saying that you only get one chance to make a first impression is particularly true for houses so you should aim to maximize curb appeal. Attractive landscaping sells homes. At bare minimum the lawn should be healthy-looking and freshly cut, walkways should be swept, flower beds mulched and bushes trimmed.
You can take landscaping to the next level by adding more flowerbeds, upgrading the walkway lighting, resealing the driveway and putting in a deck or patio. According to Remodeling magazine, landscaping upgrades provide home sellers with one of the biggest bangs for your buck, with ROIs as high as 150% according to Realtor.com.
A great enhancement to curb appeal comes from adding a new front door. A steel entry door that costs around $1,200 can produce an ROI greater than 100%, according to Remodeling magazine. An existing entry door that is in great shape can be updated with a new handle and lock set. Solid-looking handles and locks signal a secure home. Brightly colored planters on either side of the entry door can add a seasonal touch. Another great feature that home buyers love is a doorbell equipped with a camera and speaker. Smart doorbells can usually be purchased for $200 or less and most homeowners appreciate the additional security barrier. Also consider updating the garage door, which can represent as much as 40% of the home’s exterior and be a focal point of curb appeal. In their 2016 survey Remodeling magazine estimated the cost of a new mid-range garage door at $1,650 and ROI on this project at 91.5%. An upscale garage door costs approximately $3,140 and provides a 90.1% return on investment.
There are many upgrades that can add value to your fix-and-flip home. The trick is to focus on home improvements that 1) hold universal appeal and 2) provide you with the biggest return on your investment dollars.