There are two legal ways to increase your wealth.
1. Keep more of what you have (eg, Tax strategies, rehabilitation efficiency, cost savings)
2. Add value to something (eg, a real estate investment, stocks, bonds)
Let’s focus on adding value to your rehabilitation investments.
The most obvious one is undoubtedly bringing it back up to standards. WE HAVE to do the obvious things like:
– Make sure there are no leaks in the pipes and that the entire plumbing system is in good working order, including the potable water and sewer / septic and the water heater.
– Make sure the electrical system is safe and working. This may require an update. This includes all plugs, circuit breakers, heating and air conditioning.
– There can be no roof leaks! Obviously, but sometimes this is difficult to determine if it is not a rainy season. You may have to carry a garden hose to the roof to be safe. Put someone in the attic with a flashlight.
– Remove any rotten wood or termite damage, repair walls, etc.
Those items that I have listed and similar ones are obvious. But how do we add value to sight? We make it beautiful!
– We paint all the walls and ceilings (generally bright white)
– We replace the floor, or if there is acceptable carpet or tile, we professionally clean and restore it.
– We hang mini blinds on the windows.
– We trim trees and shrubs, paint the exterior to make the exterior look fresh.
Now to get the sale, or to rent it out right away, we do some of these things that really make a difference (notice the emphasis on the kitchen and bathrooms!):
– Replace or renovate kitchen cabinets, sink, and countertop.
– Replace toilet, vanity and resurface or replace tub.
What if we really want OUR property to stand out in the market? What if we want there to be NO doubts about what great house this is in the buyer’s mind? What if you want TOP DOLLAR? Try these inexpensive updates!
EXTERIOR
– Put a decorative fence in front. Plant some shrubs along the front of the house with attractive landscaping bark around them for color.
– Replace the front windows with something more attractive.
– Install lighting along the walkway
– Plant a tree
– Install a new mailbox
– Build a platform in the back.
– Increase outdoor lighting. Motion sensor lights are a nice touch.
INSIDE
– Install a security system. Sometimes the system is installed for free with one year of follow-up. Make the first year of free monitoring (paid for by you) a selling point.
– Install a garage door opener
– Install a used hot tub. You will be surprised how many people don’t want their hot tub anymore!
– Includes microwave.
– Buy new appliances. A little pricey, but a negotiator. Try to make this an incentive to get a full price offer.
– Lay ceramic tile instead of vinyl.
– Opt for hardwood floors that open and lock over carpet, especially in a large living room.
– Upgrade the faucet to something stylish and modern. There are hundreds to choose from. Opt for an oversized sink.
– Replace the cabinet and drawer accessories with something more elegant. This can make an average kitchen POP for a little extra cost!
– Add ceiling fans instead of just new ceiling light fixtures.
– Add chair rail trim in dining rooms and living rooms.
– Buy the attractive switch and outlet covers instead of the basic contractor covers.
We, as investors, must make rehabilitation fit our strategies. If we want to rent the property, it probably won’t add as many improvements. If you are looking to sell and need that property to be noticed, you should add as many updates as possible within your budget, especially visual updates.
I hope this list has got you thinking creatively about how to harness the value of your next project.