When it comes to rehabbing investment properties, there are a few things about renovating that are best left undone.
Today, let’s talk about that:
1. Poor Return on Investment Repairs
There was a study by the National Association of Realtors that came out showing the increase or decrease of price of new housings.
According to that study, the prices of full bathroom increased by 23% while the prices of the partial bathroom, garage, central air conditioning, fireplace,and basement increased by 15%, 13%, 12%, 12%, and 9% respectively.
On the other hand, In-ground pools didn’t show any change while In-law suites and professional officeswere down by 5% each.
Even though they were not a big shock to anyone but there are certain characteristics that were obviously going to change depending on the area.
For instance, a garage in the city with a high walk score is not that valuable as in an urban town where it has a lower walk score.
Also, a basement won’t be desirable if it is going to flood in that area. This is how these characteristics work. Now keeping these on a side, some of the renovations are simply not a good idea. Professional offices and In-law suits are two of those which will just turn out to be a bad decision. Also, turning your garage into a beautiful bedroom is a bad idea as well.
2. Fixing a property up very nicely
This is another notable mistake that new investors and sometimes experienced ones make. They don’t realize that fixing up any property to look at its best is unnecessary unless it is a luxury house.
Most of the rentals, especially for the middle class and working class rentals don’t need anything fancy. They just need to make things “work”. In these cases, functionality is what you should look for, not looks and appearance.
Of course, how the property is presented is important and so is the durability. However, you don’t need to use expensive stainless steel appliances, granite slab countertops, bay windows, custom cabinets, etc. to fix up a middle-class rental.
3. Unnecessary & Awkward Upgrades That Don’t Fit TheProperty
Some updates are just straight-out awkward. For example, say you want to make room for a few extra bedrooms. Then how would it fit into the house? Even if you get the room for an additional bedroom, it will be only accessible via another bedroom door as there won’t be a completely empty place lying around for you to make a new room.
Also, the additional bedrooms technically won’t even be a bedroom as you’ll have to access the room via another bedroom which is bizarre because no one is going to use that. So why even bother for such awkward upgrades?
4. Upgrades that are just a pain
Every once in a while, you’ll come across something so inappropriate that it’ll become a pain for you; like skylights. You know they are awesome but they don’t belong in an average rental property unless it is a luxury house. Also, the skylights come with additional risks of raindrops dripping from the ceiling. These are the types of upgrade that’ll simply make you ask “why?”
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