When renovating a house during a flip the temptation may be to simply look at every opportunity to upgrade and address as many of them as your budget will allow. But some renovations fail to generate a significant return on your investment and you should think twice about doing them.
- You may think about investing in high-end landscaping to enhance the curb appeal of a newly renovated home, but peoples’ tastes in landscaping tend to be very specific and many home buyers will be just as happy to have simpler landscaping that gives them a “blank canvas” to pursue their own vision. In the case of multimillion dollar properties, you may need to invest more money in landscaping in order to ensure that it’s properly kept up until the time of sale.
- Another curb appeal item is ornately designed front stoops and stairways. These are very expensive to build and are not a very effective selling point – the extra money you spend won’t help you get higher bids than you would have with something that’s attractive but more basic.
- Swimming pools cost too much to generate a good ROI unless you’re dealing with a home in a luxury market where additional amenities such as these are a baseline expectation for properties. For the average middle-class home, the money and time spent to put in a pool won’t generate enough ROI to be worthwhile and may even put off some buyers who don’t want to take on the time and costs associated with maintaining a pool.
- Building above market standards. What this is means is that in neighborhood where the average home is worth $500,000, piling on upgrades isn’t going to make the house you’re trying to sell worth $750,000 – buyers who are shopping for a house in that price range are looking in neighborhoods where that’s the median price. At most, you want to build slightly above the standards of the market to give a potential buyer the feeling they’re getting one of the better deals in the area.
Wisely spending your money on renovations which will get higher bids from buyers is key to successful house-flipping. If you were considering investing in any of the items outlined above, take another look at your property and see if the money can be put to better use elsewhere or sell it to a cash home buyer in Long Island New York.