You've bought a house, a fixer-upper you can make some money on. What improvements and repairs should you make? First of all, you need to know this before you buy, as I explained in another article. Before and after you buy, though, you need to have some simple rules with which to start analyzing possible fixes.
Return On Investment
A young couple was very disappointed when I told them there house was worth $110,000. "We just put $40,000 into remodeling the kitchen!" they told me. I looked at the kitchen. It was nice. They had added $10,000 in value to the house by spending $40,000. This is a classic example of a bad return on investment.
With fixer-uppers, you have do things which give the most "bang for the buck." Aim for a three-to-one return on improvements. If you're going to resurface the driveway for $1000, it better raise the value of the home by $3,000. Even when you're just guessing, keep this three-to-one formula in your head, if you want to invest safely.
How To Fix A Fixer-Upper
With things like new curtains, you can't really estimate the increase in value. What you can do, though, is group together the many small repairs and improvements you are considering, and imagine how the house will look when you are done. Then you can estimate whether you will have increased the value enough to justify the cost.
It often is in the small details that you'll get the best return on investment, so look at these first. A new mailbox, flowers on the porch, a raked yard and trimmed trees - $30 total if you do the work yourself - can make a big difference in the first impression potential buyers have. First impressions are important.
Other small investments that pay big include shiny new switch covers (less than $1 each), shelves, a birdhouse, new doorknobs, new light fixtures, curtains, new rocks or wood chips on outdoor paths, new faucets, new woodstain on decks, and general cleaning. Stand in front of the house and imagine what it might look like with various small improvements (flowers, wood-rail fence, birdbath, etc.).
The Big Fixes
Obviously, there are things that just have to be repaired. The basic systems must function. Improvements, though, should be subject to the three-to-one rule. You may have to get creative here. An investor friend of mine once had a wall put up, and for less than $1000 created a new bedroom, probably raising the value of the house by $8,000. Now that's a good return on investment.
Bathrooms and kitchens are important. A $1000 updating of a bathroom can add $4000 in value to a home. Spend $2000 wisely in the kitchen (New fridge, re-finish the cupboards, add a garbage disposal, etc.), and you can add $8000 to the sales price of the house. Look for changes which are most universally valued (don't paint the kitchen pink because YOU like that color), and be sure you get a decent return on investment.
Depending on the fixer-upper, there are many potential improvements that can be worth doing. These include adding a carport, new doors, fences, gazebos, sheds, painting, carpet, benches, a new closet, a new toilet, a new stove, a shower/tub surround, and trees or bushes. The bottom line is the bottom line: be sure anything you do returns more than you spend, preferably three times as much.
Steve Gillman has invested real estate for years. To learn more, and to see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com
You may think choosing garage doors is straight forward, however... Read More
When you have reached the decision to purchase new windows... Read More
Functionality and aesthetics are the two main objectives of any... Read More
Hello, my name is John Rocco.I grew up around the... Read More
The style of your interior depends for a great part... Read More
Interior design for couples is one of the hottest, most... Read More
With a little bit of creativity and some imagination you... Read More
Power tools are one of the greatest conveniences for getting... Read More
Planning kitchen remodeling If you are planning to remodel your... Read More
Whether you live in your cabin year round or it's... Read More
"What they don't tell you about Honda Pressure Washers"I recently... Read More
Imagine leaving a window open all winter long -- the... Read More
Coming up with interesting window treatment ideas that bring out... Read More
Is your bathroom looking cluttered? How about fitting new bathroom... Read More
If you are a consumer who knows just what brand... Read More
Ceramic tile can be beautiful and elegant. But it can... Read More
Choosing a color scheme can be a nerve-wracking business. For... Read More
In previous articles i explained to you how to determine... Read More
If you don't have at least one piece of fine... Read More
BE PREPARED -- Building a house is lots of fun,... Read More
Do you know that formaldehyde, a colorless, pungent-smelling gas can... Read More
Since air filters are one of the bests tools for... Read More
Have you noticed your patio door is getting harder and... Read More
A beautiful kitchen is the heart of any home (even... Read More
Duvet covers are rather versatile when you think about it.... Read More
If you are redesigning or decorating a room, or house,... Read More
Steel building kits are a comprehensive set of all the... Read More
Wouldn't it be nice to have your home take care... Read More
Everyone likes the beautiful, timeless look of hardwood floors. Elegant,... Read More
The Benefits of Self BuildingInvesting in property had always been... Read More
An air compressor is used to power air tools such... Read More
What will your next home improvement project be? Will it... Read More
Marble is any limestone or dolomite that can take a... Read More
Circuit Breakers are devices that stop the electrical current of... Read More
Bathroom vanity cabinets are an essential component of any bathroom... Read More
Its spring time and that means we start working on... Read More
Everyone likes the beautiful, timeless look of hardwood floors. Elegant,... Read More
Six years ago, I had not yet turned on a... Read More
PLACEMENT?Ladders should be placed so each side rail is on... Read More
If you are concerned about asbestos exposure you are not... Read More
While most buyers of double glazing are looking for replacement... Read More
If you are redesigning or decorating a room, or house,... Read More
Are you overloaded? Have you become a part of the... Read More
The Home InspectorWhen you think about it, it is a... Read More
You may think choosing garage doors is straight forward, however... Read More
While you are cleaning leaves out of your home's gutters,... Read More
Modern mailboxes are made predominately from cast aluminum or stainless... Read More
Choosing a color scheme for a room can be a... Read More
Have you ever thought about fixing a broken window in... Read More
Kitchen design is a sea of opportunity filled with potential.... Read More
Besides providing your home with more living space, a home... Read More
Wholesale vinyl flooring is the perfect solution for people who... Read More
The cordless impact wrench is quickly gaining in popularity among... Read More
With a little bit of creativity and some imagination you... Read More
A larger air conditioner will not always provide more cooling.... Read More
So you've decided to build a new home. Like many... Read More
These days a lot of homeowners are replacing their old... Read More
Look no further for long lasting perfumes. House of Rose... Read More
On my blog, I once wrote about life on the... Read More
What exactly is mold? There are over 100,000 different kinds... Read More
Interior Design today is all about customizing your built environment... Read More
The secret to your home's interior design is Love.If you... Read More
MISTAKES.Don't worry about making mistakes. Everyone makes mistakes. Why should... Read More
Lighting"Light has illuminated the path of humanity" ? While Einstein... Read More
No one wants to have their house equipment broken. But... Read More
Beginning interior design is a challenging, exciting adventure that one... Read More
Home Improvement |