When you renovate a home to sell for profit – more commonly called a “fix and flip” project – there are certain areas where you can spend a little less and get away with it. On the other hand, there are some areas where you should never skimp because doing so may end up costing you far more in the long run. Here’s where to sink your dollars to maximize on profits.
The Foundation & Structure
Before you can sell a home, it will have to pass a fairly rigid inspection. If there are any issues with the home’s foundation or with its structure, you may end up having to do much of the work all over again before you can sell. Don’t skimp when it comes to these things. A prime example of something that many first-timers overlook involves load-bearing walls. Though removing a wall may open up the home and make it look more modern, it can also put it in danger of collapse and cause you to fail an inspection.
When people buy homes, the kitchen and master bathroom are the two main selling points, so you shouldn’t skimp in either of these. Kitchen appliances are crucial for selling a home for a profit, so choose the ones that best suit the home’s size and price point. Don’t go all out with a huge double oven and eight-burner range for a home that will be priced at the lower end of the range for the area, but do make sure you choose nice appliances with plenty of room – and make sure they’re energy-efficient, too.
The Master Bathroom
The master bath is the second most important room in a house, so it’s important that you don’t skimp here, either. Replace outdated tubs, toilets, vanities with more modern options, or if you want a vintage feel, choose options that suit the vibe you’re trying to create. Try to go for low-flow options to help save on water consumption and cost, and perhaps consider adding a couple luxury items to make it even more attractive. A bidet or a rainfall shower head won’t cost you much, but they can go a long way toward tempting buyers.
Consider the renovations you’re making and the type of consumer you want them to appeal to. If it’s a luxury home, use hardwood floors that suit the style. If it’s a more affordable home – or perhaps even a starter home for a young couple or family – nice vinyl is an affordable option that is durable and offers plenty of style. Cork is another option that’s growing in popularity but won’t completely break the bank.
The Home’s Exterior
A common mistake that many flippers tend to make when they’re new to these types of investments involves sinking their entire budget into the home’s interior while completely ignoring the exterior. Curb appeal is critical, and while it certainly doesn’t have to be perfect, it’s important to make it attractive. Keep the lawn trimmed, plant some shrubs and flowers, and have any trees trimmed before you list the home. It may cost a little extra, but it’s what potential buyers want to see.
Fix and flip projects can be incredibly profitable, but only when you buy for the right price from the start and you focus your renovation budget on the right areas. You should never skimp on the five areas above or else the entire plan may backfire and leave you struggling to find a buyer.