It Pays to Renovate

missmanors · #1 06-28-2008, 07:35 PM

When flipping houses, it pays to do whatever renovations are necessary before advertising it. Renovations can get you top dollar for a house, instead of getting just a little over the price you orginally paid for the property.

One apartment in New York City, for example was originally purchased for $685,000 in 2006, by a man who wasn't one of those people who are afraid of the word 'renovation'. He believed that if he gutted the kitchen, put in all new cabinets, floors, walls, and appliances his efforts would be rewarded when he sold it. Checking out the cost at Home Depot, he found that he could do the work himself for around $20,000.

Upon some considering the work involved, he wasn't sure that he could do the job justice and decided to hire a contractor to do the renovating, and found that it would cost about $37,000 for the total renovation. Though the $17,000 difference would be nice to have in his pocket, this homeowner wanted the job done right and hired the contracting company.

After the renovation was completed, he put the apartment up for sale after the Christmas holiday season, as the holidays are normally the lull for real estate.

In the end, he showed the apartment twice the first day and ended up with one offer which was very close to his asking price of $879,000, and another one which matched his asking price, if he could be moved out within 4 months, with an option of $890,000 if he could be moved out in 3 months, as this would coincide with their time frame to be out of the apartment they were currently leasing.

In our area these prices are abnormally high for a home, but the gist of the story is that if you want a good price for your flip, consider renovating the kitchen or bathroom........whatever room needs it most. The renovation could end up paying off in a big way when it is sold.

flippinout · #2 06-30-2008, 08:37 PM

Yes, renovation can be just the thing to help you get the optimal price for your home when you are ready to sell.

Sometimes opening up the floor plan to combine kitchen and dining room can be a plus and give the home a look of much more room than it actually has.

Kitchen remodeling is one of the best renovations you can make. By bringing an out of date kitchen up to todays standards can bring a larger offer than if you had done nothing at all.

Bathrooms are another area that is very important to prospective buyers. The bathroom has to be large enough and have enough counter and storage space to be acceptable to all.

JaredfromIndiana · #3 07-03-2008, 01:00 PM

$37,000 for a kitchen remodel? DAMN!! LOL. Seeing as I deal mostly in homes under $100,000 the most I have ever spent on a kitchen was about $5,000 or so. That was knocking out a wall and putting in new cabinets and countertops. I tried to insert a picture here but have no clue how to!

flippinout · #4 07-04-2008, 02:26 PM

Yep, Jared, that is a lot of money for one room to be renovated. I wonder how they come up with those figures.

When I get time, I will pm you with instructions of how to insert pictures in here, but it will probably be Monday as I am going to finish up what I am doing here and then enjoying the holiday.

JaredfromIndiana · #5 07-04-2008, 09:45 PM

Awesome! Thanks!!

missmanors · #6 07-05-2008, 05:54 PM

I agree with you Jared, those costs are outrageous. You have to consider though, that this came from New York, and it seems that all costs there are exhorbitant.

I'm sure that for you, in Indiana (small town perhaps?) and here in my small town in Ohio, those costs would be cut way down. We renovated our entire home for under $10,000. This included, wiring, plumbing, new bathroom, and kitchen cabinets and counters.

JaredfromIndiana · #7 07-06-2008, 12:24 PM

I'm from Fort Wayne, population around 300,000. Your right about those numbers probably coming from places like NY or Cali. Now don't get me wrong, if I was remodeling 1.5 million dollar houses I could see spending that much putting in top end stuff, but the average price of the houses I do are between $75-100,000 selling price.

Where are you from in Ohio? I lived in Delphos (near Lima) for a year or so back in 1998.

missmanors · #8 07-06-2008, 05:26 PM

The houses you are flipping are still a good price range. I can't imagine trying to flip those costing millions, especially here, lol. There aren't too many millionaires in my area that I could sell to.

I am located in the southeastern part of Ohio. Right on the Ohio River, close to Wheeling, WV. (of course, I have to cross the river to get there, lol)

flippinout · #9 07-07-2008, 02:17 AM

I dont see how it can cost that much to renovate a kitchen for everyday people.

I like things to be very nice in my home but my $300 range cooks just as well and as fast as those high end ranges people think they need to put in renovated homes. And it behooves me to know why they think this way.

I want a kitchen that can be lived in and enjoyed as the kitchen is where everyone that comes to visit spends the most time. And, for the everyday person, those super expensive kitchens would find guests afraid to move. lol