A Place in the Sun: Build a Back Deck for a Great ROI on Your Fix-and-Flip

What do people bring with them when looking to buy a home? Naturally, they bring a set of concerns with them; worries about the neighborhood, schools, about whether they can afford a place, and a host of other things. But they bring hope with them as well— hope and imagination. That’s the key. Potential buyers will decorate a house in their minds and extrapolate moving forward: this room can be where our kids grow up, this will be where we have dinner parties, this is the perfect spot for the Christmas tree. In other words, they imagine a property listing as a home and a place where they can build a future. The smart fix-and-flipper will know what inspires that dream: it all starts with a deck.

The key to fixing a house for sale is understanding where to spend the money you get from an equity-based hard-money loan. You want to look at strong return on investments, both emotional and financial. Few projects match both descriptions along with throwing in a spacious back deck— and you’d be surprised how influential that back deck can be.

The Emotional Power of a Back Deck

Think back to your prospective buyers. Imagine a young couple, maybe recently married and thinking about having children. They can see themselves out on the back deck, watching their children run around the yard. This works for couples that already have children or grandchildren. This works for people who love the idea of having a place to sit and have a few drinks while watching the summer sunsets or having a bunch of friends over to grill burgers.

While you can do all this in a backyard without a deck, it just isn’t the same. A deck is a gathering place, a central spot, part of the house and part of the outdoors. It feels natural for furniture and the sun to coexist. That’s important. No one can look at a deck and not imagine themselves out on it. A backyard is filled with inchoate ideas of leisure; a deck provides form and substance. It’s perfect for a rehabber.

Return on Investment with Decks

Of course, feeding the imagination of buyers isn’t your only concern (though it is a big one). The other side of that involves the practicalities like balancing cost vs. reward. There is no question that decks can be expensive. A good deck can run you anywhere between $8,000 and $15,000, depending on the material. Composite decks tend to be more expensive while wood runs around $10,000. Obviously, size makes a difference as well.

The composite deck provides a return on investment for homeowners of about 70% while a wooden deck comes in at around 80% (mostly due to lower cost). Now, this isn’t exact because you aren’t a homeowner- you are selling to one. So what would the advantage of a composite be?

For one thing, they are less work to maintain. Composite decks are made up of a combination of wood and plastic, which gives them a more healthy and natural look than all-plastic or all-vinyl decks. It’s not as strong as wood (and to me, not as nice looking), but it doesn’t rot, warp, or crack, and doesn’t need to be painted or sealed. The latter two advantages alone can save you—and the buyer—money. Being able to tell a buyer that they have a deck that needs very little maintenance and isn’t going to need constant sanding, staining, and sealing will make a huge difference.

That’s not saying anything against wood. A strong, heavy wooden deck is something that potential buyers love. It gives them the feeling of permanence and authenticity.

The Patio Option

Of course, there is a third option: a patio. Patios are considerably cheaper to build and offer a comparable ROI. One could also make the case that patios are more natural because you can incorporate trees and shrubs into their design, which result in a more organic feel. So, how do you know which to choose?

Backyard topography makes a difference. A sloped yard makes it very difficult to have a patio. People who value a view will want to have a deck. It is more removed from the yard as well and offers a sense of level and distinction; it can give “rooms” to a yard.

In the end, see what’s more popular in a neighborhood. Don’t be afraid to talk to neighbors, or ask around. People on the ground—or above it in a deck—can give you the best information. Your fix-and-flip rehab project is important. Getting a hard-money loan from a trusted lender is a great way to get the project going and making the right decisions about backyard dreams is the best way to make it successful.

Your real estate assets are your best investments for the future. At Socotra Capital, we’re proud to be the premier direct hard money lender for California real estate. Contact us today to learn more about how we can help.

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