Let’s take a closer look at why you shouldn’t do extensive renovations on a home you’re planning on selling soon and what you should do.
With the advent of HGTV and other home improvement-related media, the notion of buying and flipping a fixer-upper has begun to appeal to a broader range of people. However, there’s always a downside to consider, even if you’re already a seasoned flipper. Here’s why it might not be the best idea to perform extensive renovation projects on a house that will soon be back on the market.
💵 It Might Not Be Worth the Investment
While low-cost renovations can boost the value of a home, MarketWatch warns that the cost-value ratio usually declines on more expensive renovations. While replacing a storm door or refurbishing a deck might add a significant amount of value to the house, you’re likely to recoup just three-quarters of your investment from a five-figure kitchen remodeling project.
⚠ It Can Make the Home Harder to Sell
Take a good look at the average price of the homes in the area. Rules of Renovation notes that buyers tend to look in certain neighborhoods not only because they like the general aesthetic and location, but also because the houses there are within their price range.
👎 It Could Alienate Buyers
As long as we’re on the subject of targeting the right buyers, remember that your planned renovation projects might not be in line with their tastes. You’re likely to generate the highest return on your investment in the kitchen and bathroom areas, but your idea of a dream kitchen could be significantly different from that of your potential buyer.
If you decide to keep things tame by repainting instead of renovating, stick to a neutral palette for best results. WOW 1 Day Painting recommends light gray, taupe, and white for selling in 2019. It might look boring to you, but to a buyer, it looks like an opportunity.
🤔 What should I do?
We’re not saying that you should forego sprucing up the property entirely. Repairing a crumbling stone wall, freshening the paint, replacing worn or broken appliances with newer models—all of these actions can help you to get a solid return on your investment. If the home needs significant structural work, however, it’s probably not the best choice for a flip.