We were taught that when trying to sell a house you don’t want to be the house that isn’t selling because “we didn’t fix the house enough!” What if you fixed the holes in the walls and repaired the air conditioner but decided to save some money by just cleaning the old carpets and leaving them in place.Do you think this would have any affect on a buyer’s willingness to pay top dollar for your house? Whatever the “one repair” is that was not done could ultimately be the deciding factor for a buyer to pass on your house.The point is that if you “under repair” your properties in a down or flat market you are just that much less likely to sell them for the price you desire or to even sell them at all.
So how do you know how much to repair your properties? Well, we have always taken the approach of being at least on par with or one step better than your top tier competition in your particular marketplace.For example:If all the top resale comparable houses in your neighborhood have granite counters and stainless steel appliances, don’t expect your 20 year old yellow tile counters and white appliances to bring you the same demand.You need granite and stainless too! In a hot market, this theory goes out the window.Anyone and everyone is just trying to get their hands on some real estate.As long as the house isn’t falling down you are probably going to get it sold at a reasonable number.That type of market is not what we are experiencing currently.
In our houses we tend to use the same materials (flooring, counters, paint, etc.) that seem to appeal to most buyers.We take a bit of pride in improving the asset from something that was a hideous neighborhood eyesore and turning it into a beautiful home.We do all this, of course, with a budget in mind of what will ultimately bring in the highest return on our money. There have been many times where neighbors thank us for fixing up that “dump” and improving the neighborhood. Those “thank you’s” are validation that we are doing a good thing, not just for business, but for the communities.
Your rehabs will vary of course, based on the needs of the house and the demands of the marketplace. For example, here are some pictures of a house we recently fixed. The house pictured below was actually in good shape when we bought it (nothing needed on the outside at all). It was just a little dated and no upgrades. We simply replaced the kitchen counters and appliances, painted the cabinets and walls, replaced a few fixtures and called it a day. By doing this we improved the value of the home nearly 30% and brought the home to the expectations of a buyer willing to pay top dollar for a home in the area. We resold this house in 1 day.
Below is a video of a major rehab projects we have done recently. This house was completely destroyed on the inside and needed a lot of work. The transformation on this house was probably the most dramatic of any house we have repaired. Added value: 90%.
The photos below were a house that also ended up being a major rehab. This house needed everything: roof, windows, flooring, kitchen, bathrooms, fixtures, a/c, heater, pool work & landscaping. Value added: 110%