Flipping homes can be an effective way to make money from real estate. However, you need to know what types of upgrades will yield the highest returns on your investment before you decide to make them. Here are just some strategies that you should employ to ensure that you maximize your profits from each flip:
More Living Space Generally Means a Higher Price
In some areas, homes are priced per square foot. Therefore, adding more living space will translate to a higher asking price for the house. Some ideas for adding more space include finishing the attic or basement. In some cases, adding an egress to an already finished space will allow you to advertise it when listing the home.
It may also be a good idea to put an addition on the home that can be used as an extra bedroom, office or bathroom. If you are going to add to the house, make sure that you have the proper permits to do so. On average, each additional square foot that you add of living space could equal $100 or more added to the listing price.
Update the Kitchen and Bathroom
For those who have a limited budget, it is in your best interest to focus on the bathroom and kitchen spaces. Kitchens are where those who live in a home are going to spend the majority of their time. Bathrooms are generally where an individual is going to start or end his or her day. Being able to do so in style will make it more likely that a buyer will pay more for the house.
Upgrading the kitchen and bathroom is also a good idea because it makes the home easier for the next buyer to sell in the future. That alone will make the home more valuable because no one wants to pay for something that they can’t liquidate if necessary. Depending on where you live a new bathroom or updated kitchen could add $20,000 to $100,000 to the value of a house.
Put a Hot Tub in the Backyard
A nice spa with all of the proper hot tub accessories in the backyard makes a home more appealing because it gives the owner a place to entertain or relax after a hard day at work. They can be used either in the winter or the summer, which makes it more versatile than a pool for those who live in more temperate climates.
While individuals may be able to install them themselves, it is generally better to have a professional install it for you. It should only take a few minutes to a few hours depending on how much electrical work needs to be done to accommodate the new item.
In some cases, your installer may suggest ways that you can further spruce up your yard to add value to the flip. In most cases, a home’s value goes up by whatever you paid for it, but it could indirectly increase your home’s value because it makes the home more appealing.
Add New Front and Garage Doors
Replacing the current front and garage door with new ones makes the home look cleaner, brighter and more attractive at first sight. Typically, you will increase the value of the home by as much as 400 percent of what you paid for them. Therefore, if you spend $5,000 for new doors, the home will be worth $20,000 more.
While flipping may not be for everyone, it can be lucrative for those who understand how to do so successfully. For the most part, you have to understand what buyers in a given market want and then tailor the home to those needs to make it as attractive as possible when it goes on sale.