Getty
It only takes 30 minutes to flip a house on TV, but in reality, the big reveal requires weeks or months of meticulous work.
Many first-time real estate investors make the same mistakes when fixing and flipping a house. They underestimate the importance of design in the final sale of their property. They invest in the wrong elements that won’t get the best ROI. They design based on their own personal preferences, not those of their intended audience. Or they fail to account for construction and material delays.
If you are embarking on your first flip, take the time to plan and execute your design thoughtfully. You can’t rush the process, but it will be well worth it in the end. Follow these best practices to prioritize design in your property and get the best return on your investment.
Know what will give the most bang for your buck.
Strategic renovations can boost the appraisal of your property. But allocate your budget wisely, improving the spaces that will add the most value. The five remodeling projects that deliver the highest rates of costs recouped, according to data from Remodeling Magazine’s 2019 Cost vs. Value report, are: garage door replacement (97.5%), manufactured stone veneer (94.9%), minor kitchen remodel (80.5%), deck addition (75.6%) and siding replacement (75.6%).
Focus your attention on areas that buyers care most about, like the kitchen, bathroom and communal spaces, such as a deck or a finished basement. Even if you can’t afford a major renovation or extension, you can improve your property value by giving extra attention to the spaces within the existing footprint of the house. Add molding to the kitchen cabinets, replace the roof, finish the basement floors or convert a large closet into a spare bedroom. These changes create a “wow factor” that motivates faster offers.
Build an expert team.
As a real estate investor, you don’t have to know anything about design or construction. Just surround yourself with experts who do. A good architect, contractor or interior designer will walk into a house and see possibilities that you won’t – and that’s why they’re such an important addition to your team. Hire people who understand what your audience is looking for and can bring your vision to life, while staying within your budget. If you end up doing multiple flips, try to work with the same team over and over. They will get to know your style and help you enhance your aesthetic.
Make a plan from the beginning.
Careful planning will save you time, money and headaches during your flip. When you purchase the property, measure the entire square footage of each room so you can begin to price out renovations and select materials.
Decide early on which areas you want to invest in, so you’ll be able to budget better. Do you want to redo the living room floors? Are you going to add a backsplash in the kitchen? Ask your team to put together quotes for materials and labor in high, medium and low categories. If you fall in love with an expensive material that isn’t in your budget – like marble – look for affordable alternatives – like quartz. Be conscious of how long the wait time will be when choosing materials, and opt for those with immediate availability so your build-out time isn’t affected.
Research the neighborhood.
Do your homework in the neighborhood where you’re buying to understand how much return you’ll receive for a renovation. If three-bedroom houses are selling for $200,000, would it be worthwhile to add an extra bedroom? Would it make your property stand out to add a new deck or refresh the kitchen and dining room? Put yourself in the buyer’s shoes, and ask yourself if they would consider it a valuable addition.
When flipping a house, it’s important to remember that it is an investment. Stay focused on what your potential buyer wants and where you can add the most value. And don’t be afraid to be different and be a little daring in your design. Buyers are looking at house after house, and you want your property to stand out.