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Repairing for Returns: Attracting Homebuyers to Investments

 

In a market where the value for homes has increased dramatically and mortgage rates are low, it is important as an investor to make repairs to a home that will not only give a high return on investment, but also create a home that catches a buyer’s eye. Many renovated homes give the same “cookie-cutter” feel when everything in a home is replaced for a renovation. It is worth creating a unique home that appeals to that also includes energy efficient and salvaged materials. Every market may be different, and it could be valuable to consult with a real estate agent who knows the area well to assist with the local buyer demand in current trends. Renovation can be costly, so it is important to appeal to all sellers to be the last house on the market and the first one off and find the repairs that give the best return on investment.

Starting With a Blank Slate

Interior paint is a simple renovation that gives the home a clean blank slate for the new homeowner. Painting the home over in a neutral color that compliments the fixtures, cabinets, and flooring can brighten a home to appeal to more buyers. Paint colors can differ from buyer to buyer, while some may even make a home feel smaller and push away potentially interested buyers. With the interior paint, if the home has popcorn or textured ceilings, it may be worth the labor-intensive feat of scraping these popcorn ceilings. Many buyers in the current market believe popcorn ceilings make a home feel dated and removing these could be the push between buying and walking away if other homes in the market have been updated to flat ceilings.

While interior paint is a minor repair, an investor or homeowner could add unique-ness to the home by using cost-friendly, salvaged materials to create interesting feature walls. An example could be using old barnwood for an accent wall in a dining or living room, or even using the old barnwood material for interesting casings throughout the home. Using repurposed wood for a new fireplace mantle or even giving brick fireplaces a German smear, or whitewash, can help give the home a facelift at a lower cost.

Paying Attention to Detail

The easiest and most cost-effective improvements can be the minor repairs a home typically needs after it has been lived in for a while. Even if the home is only a few years old, a deep clean on all appliances, cabinets, and countertops can be conducive to making buyers feel this home is theirs from the moment they walk in. These items can be as simple as new toilets (or just toilet seats) with clean, matching bathroom fixtures, or even grouting and re-caulking all wet areas for a newer feel. Adding a few dimmer switches throughout have a low cost while adding an upscale ambience. These small repairs combined with matching outlets, switches, and cover plates or caulking the windows throughout, shows the buyer the house is fully move-in ready and they do not have to worry about these before they even unload their furniture. Additionally, updating the doorknobs and hinges to match throughout the property gives the home a finished and polished feel, especially when using desired finishes such as brushed nickel.

When replacing light fixtures, use energy efficient products that have “provable” cost values are important to buyers in today’s market. These items would include LED light bulbs and water saving shower heads. Making properties green through renovation can be key in marketing while also updating the home to feel light and bright.

Looking Long-term

Buyers are also interested in seeing the repairs completed for items that are long-term. This includes appliances, roofing, HVAC, and potentially old fixtures throughout. If a roof or HVAC unit is within a year of its useful life, it may be worth replacing even if that is the only repair completed prior to selling the home. These are a few major repair items the buyer will not want to dish money out for only a year after purchasing the home. These also tend to be the repairs buyers are less capable of following on HGTV and completing a DIY project, so the reduced maintenance could be a big seller on an older home with bigger ticket items. If these items need to be replaced and are not, the buyer will usually want a credit to be able to complete these repairs once they own the property.

The largest focus in most home renovations is the kitchen, and almost any homeowner will tell you they spend an incredible amount of time in this space, so having it be functional, beautiful, and cost-effective is a high priority for many home buyers. Kitchens are typically the most expensive room in the home to renovate with high ticket items such as cabinetry, countertops, and appliances. With the high cost of buying a home in the current market, most buyers are looking for a brand new, sleek kitchen to include white shaker style cabinets and a complimentary granite. However, if the cabinets are in good condition and only outdated, sanding and painting the cabinetry to the desired white color cuts huge costs as opposed to just replacing the cabinets. While this option is more labor-intensive, the price still comes in much lower than that of a complete new set. Continue refreshing the kitchen with new hardware for a finished look to the newly painted cabinets. If it is necessary to replace the cabinetry, consider adding a subway tile backsplash and floating shelves to save on the cost of upper cabinets. Homeowners can tastefully display their matching dinner sets on these shelves, while also adding personal touches to make the home their own.

For the countertops, granite may be expected, but renovators could surprise buyers with a quartz or synthetic stone material. More great options include using a “butcher block” or a concrete countertop—even if just for the kitchen island to give the home a more unique feel. Replacing these worn out surfaces is typically very appealing to a buyer for the home to feel brand new.

Flooring can easily make or break a living space. While the flooring doesn’t have to be unique, most homes with regular linoleum or sheet vinyl flooring have a feel of being older, and carpet areas can appear to be dirty and dated. Simply switching out old carpet for new carpet can be a breath of fresh air for buyers since carpet can hold much more dirt than hard surfaces. Consider removing the carpet on the stairs, refinishing the treads and painting the risers. Real hardwood flooring can be sanded and refinished for a new look while keeping the desired original hardwoods throughout the home. High traffic areas such as kitchens and all entertainment spaces can benefit well from replacing old flooring with a luxury plank vinyl (LVP) that can be inexpensive to install, while also making the home feel larger and cleaner. This LVP flooring is also highly desired in homes right now, as it can give a hardwood floor feeling without the high cost of installing hardwood floors. LVP stands up to high traffic and moisture, making it a fantastic all-around flooring product. Savvy renovators could also look for concrete flooring on the first level of a home, and they can acid stain and finish the concrete flooring for a more desired, modern industrial look.

Attracting Buyers Through Curb Appeal

Last to mention, and frequently overlooked, is the importance of curb appeal and minor exterior repairs such as a quick pressure wash. Laying mulch and planting a few colorful flowers can give the front landscape a fresh look. Simply sprucing up the yard and repairing any cracks in the sidewalk can make the home look like the best home on the block while adding low costs to the repair budget. With the landscaping, creating a welcoming front view overall is important, so consider putting a fresh coat of paint on the front door or shutters to add a splash of color to a potentially bland color scheme–after checking for any HOA regulations, of course. A colorful lawn and front door can entice buyers to step inside and fall in love. A fresh coat of paint and ensuring your house number is visible on your mailbox makes the listing easier to find for potential buyers. This is the first and last part of the home the buyer typically sees, and first impressions count.

Finding the repairs to create a unique, completed home renovation on a budget takes creativity and a focus on the repairs that will truly bring value to the home. Using the pre-existing materials in the home can be a large cost-saver, while also modernizing the home and giving it a “new home” feel. Each home will have unique required repairs, but the use of salvaged materials and the idea of repairing for value can make full use of a renovator’s budget—no matter how big or small.

About Author: Alyssa Sprague

Alyssa Sprague is Senior Account Executive at Property Masters, Inc. where she assists in the daily management and organization of home renovations for Property Masters’ single-family investor and REO clientele. She also holds the role of President of the inaugural Think Tank council at Property Masters. She strongly believes that in a group effort, ideas can be exponentially expanded with positive encouragement to produce the best possible outcomes.
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