Yesterday, I talked about income properties and how you can get started with investing in real estate. If you are looking to start flipping houses, or if you are looking to sell your current home and downsize, it’s important to know what will help get your house sold as quickly as possible, and get you the best price for your property.
Now, if you aren’t flipping a house as an investment and you’re just looking to downsize, you may be ask:
“Why would I renovate my house now if I’m going to sell in [pick any short timeframe]?”
It’s a valid question for two reasons: First, if you make upgrades before you’re about to sell, you won’t get to enjoy the money you’ve invested. Second, a lot of upgrades don’t necessarily deliver the return on investment you would imagine.
That goes for flipping homes as well. You need to be smart when picking the things that you choose to upgrade, so you don’t spend more than you need to on your flip and still get the maximum profit potential from your property.
According to Remodeling magazine’s 2019 Cost vs. Value report, most home remodeling efforts only increase a home’s value by 50% – 80% of the average project’s costs.
For example, the average remodel for a mid-range bathroom is $20,420. According to the report, you’d make back only $13,717 (67.2%) when you sell.
If you aren’t flipping a house or looking to sell immediately, your best bet is to make small upgrades over a longer period of time. This way you can enjoy the upgrades while you’re still living in the house and it’s not one big expense or project you have to deal with when you eventually sell.
Of course, this is easier said than done. And if you’re asking the question, I’ll assume you don’t have much time to waste and you are looking for your best options now.
So, what kind of upgrades deliver the best bang for your buck today and what kind of upgrades will get your home off the market fast?
Here are 10 upgrades to consider in 2019:
Upgrade #1 – Exterior Lighting
85% of buyers want this feature and the cost to install exterior lighting is relatively cheap. You’re looking at around $65 per fixture.
If your lawn is well kept, exterior lighting is a nice finishing touch that will grab a buyer’s attention before they even walk through the front door.
In fact, exterior lighting is the second most-wanted outdoor feature, according to the National Association of Home Builders. Choose between spotlights, walkway lights and pendant lights.
Exterior lighting also signals safety. Even just having motion-sensor lights can be a big plus.
Upgrade #2 – Laundry Room
91% of buyers say they want a laundry room. The investment varies but you’re looking in the neighborhood of $1,000 to $5,000 for a small-scale project.
If your guest bedroom looks anything like mine, you know why homeowners rate a laundry room as a must-have feature.
Homeowners want a separate room to fold and iron clothes, a place that keeps the mess out of the main living spaces.
If your house doesn’t currently have a laundry room, the basement is typically the easiest (and cheapest) place to put one. Utility lines are already there, and most basements are unfinished so you don’t have to demolish anything to start.
A basement laundry room will set you back $1,000. If you want a laundry room or laundry closet close to your bedroom that fits just a washer and dryer, you’re looking at $5,000.
And if you want a full laundry room with sink and storage cabinets included, the price climbs to $10,000 or more.
Upgrade #3 – Garage Storage Space
85% of buyers say they want garage storage space. Buyers with growing families especially need more storage space.
And unlike a backyard shed or the attic, garage storage is more easily accessible. For cost, you’re looking at around $2,025 – $2,363 per 380 square feet.
Upgrade #4 – Energy Efficient Appliances and Windows
89% of buyers want energy efficient appliances, windows, and doors. The cost of owning a home is not cheap, so buyers are looking for anything to lower monthly utility bills.
Energy-efficient windows can trim heating and cooling costs by 12%, while Energy Star-rated appliances, like washing machines, can save homeowners around $45 a year or more.
Energy Star-qualified windows use an invisible glass coating, have vacuum-sealed spaces filled with inert gas between panes, sturdier weather stripping than regular windows.
And they use better framing materials to reduce heat gain and loss in the home.
Upgrade #5 – Patio
87% of buyers want a backyard patio. If you’re thinking of installing a concrete patio, your cost is around $963 per 120 square feet.
Only recently have outdoor living spaces gained in popularity. I blame the backyard makeover shows, but it’s good news for sellers.
A nice patio will help sell your home faster because buyers can envision themselves sitting outdoors with friends having drinks or cooking meals.
Also, installing a patio is a lot cheaper than adding an addition to your home. So you get more living space for less.
Upgrade #6 – Ceiling Fans
85% of buyers say they want ceiling fans installed. Similar to the Energy Star-rated windows and appliances, homeowners these days want anything that will lower utility costs.
A ceiling fan with light kit and remote control will set you back $466. Because ceiling fans create a wind-chill effect, a person sitting in a room will feel cooler when the fan is on.
According to Energy.gov, homeowners should be able to raise the thermostat level by four degrees without a reduction in comfort while the fan is in use.
Upgrade #7 – Walk-In Pantry
83% of home buyers want a walk-in pantry. Costs vary based on design but the reason why most home buyers today want a walk-in pantry is because kitchens get overcrowded when there’s not enough space to store essentials.
Unlike reach-in closet pantries, walk-ins allow for more storage. Which is critical for larger families that buy in bulk.
Most walk-ins are about 5 x 5 feet and have open shelves. Just make sure your pantry is installed somewhere cool and dry.
Upgrade #8 – Hardwood Floors
83% of buyers say they want hardwood floors. For cost, you’re looking at spending around $999 per 120 square feet of red oak flooring.
Homeowners like hardwood floors because they’re easy to clean, look nice, and are more durable than carpet. You can also refinish hardwood floors, extending their life even longer.
If you can’t afford to install true hardwood, engineered wood flooring is another good option. The cost is typically a few hundred dollars less or about 15% cheaper than pure hardwood and you’ll still get most of the benefits mentioned.
Upgrade #9 – Walk-In Closet
Walk-in closets are one of the most sought after features for first and second-time homebuyers.
They rank among the top five for must-have features. So if your current home has only a reach-in closet, you might want to consider revamping it.
Couples want a closet with more space, because they have to share. And singles like the flexibility of storing all their stuff in one organized space. Homes with walk-in closets in the master bedroom are a lot easier to sell than ones without.
Upgrade #10 – Eat-In Kitchen
Again, these are popular with first and second-time homebuyers. Eat-in kitchens are popular because they’re great for families with small kids.
Everyone can meet in the kitchen for breakfast before work and school and in the evenings for dinner. Costs vary based on your space but it’s not as expensive as you can imagine.
Removing a non-load-bearing wall to make room for a small table and some chairs will set you back about $1,000. Of course this can be scaled up quickly but that’s for you to decide.
To a richer life,
— Nilus Mattive
Editor, The Rich Life Roadmap
Source: Daily Reckoning