CHAPTER 9: Renovating Properties

In this chapter, we will specifically discuss those issues faced by retail flippers in the renovation process. Once you find and acquire a piece of property ripe for renovation, there will be many decisions to make. What will the budget be? What needs to be done? How long will it take? Should I do the work myself or hire a contractor? Since time is money in real estate, these are all decisions that must be made within a very brief amount of time. Therefore, it is critical to consider several factors when entering into a renovation project.

Determine a Budget

Determining a budget can be daunting, particularly if you have never undertaken a large renovation project before. The first thing to do is assess the property. What work will you need to do in order to get the property to the point at which it is likely to sell for the desired asking price? Next, prioritize. Take a piece of paper and divide it into three columns labeled A, B, and C. Then, determine the big projects that must be done. These go into the A column. In the B column, list the smaller projects that should be done, but do not, in any way, contribute to the home’s state of disrepair. Finally, list those improvements you would like to make but are neither necessary nor essential to the project in the C column. Congratulations! You have just prioritized your renovations and created an outline for a checklist.

After prioritizing, determine if any or all of the work in your A column will require a contractor or if you can complete the work yourself within your established budget and timeline. Be honest with yourself. It is very easy, at this stage, to fool yourself into thinking you are Bob Vila’s equal in any task when in reality, you are more like Tim Taylor. If you have never even picked up a hammer before, it is probably not a good decision to attempt to install drywall yourself. Once you have determined which work, if any, will require a contractor, begin your search for professionals to perform that work. If you have determined that you and your talents are up to the challenge of the DIY approach for any of the work in your A column, begin browsing local home improvement stores at this time, as well, to get an idea of what supplies you will need and what they will cost you. Get price quote printouts, if you can. Once you have interviewed contractors and determined the costs of DIY projects on your A list, it is time to move on to your B list with the remaining budget.

Many new or first time investors have a proper budget but are unsure about exactly on what improvements their dollars are most well spent. To a certain extent, this is largely going to depend on the condition of various aspects of the property when you bought it.

“A” Priorities

Assuming the property is structurally sound, you will want to consider the roof. A roof is a somewhat inconspicuous and is easily forgotten in many rehabbing projects. However, the condition of the roof is not just cosmetic, it is important to the function of the structure. A poorly repaired or rotted roof could affect the efficiency of the heating and cooling systems in the home, as well as be the direct cause of leakage or water damage. Sometimes a roof will simply need to be repaired and may essentially amount to replacing a few shingles. However, sometimes the problem is not the shingles at all, but the wood underneath. If this is the case, the entire roof will need to be replaced. When replacing single shingles, it is also important to remember that most regions have laws concerning the maximum number of shingle layers there may be on a single roof in order for it to pass inspection. Be sure to check your local codes concerning these guidelines.

After the roof, it is important to consider the hot water heater and the heating and air conditioning units. How old are they? According to industry experts, the average life of a hot water heater is 8-12 years. For an air conditioning unit, it is 12-16 years, depending on whether it is a 10 or 12 SEER model. Heating units should be replaced approximately every 14 years. If any of these units are within two years of their average life expectancy and are showing signs of their age, it would be a good idea to figure them into your budget.

Next, look at the gutters and downspouts. Even if they need to be replaced, this can be done inexpensively. More often than not, however, they merely need to be cleaned. Although cleaning gutters is a DIY project that can be done for very little money, it involves a lot of grunt work, so if you are not the type who enjoys being up to your elbows in dirt and grime, you might want to consider budgeting for a professional to do this job, which can be done somewhat affordably.

Consider plumbing and electrical issues. Is there a shortage of outlets? Is there any lighting in the house that does not work, even when the bulbs have been changed? Are there any exposed wires or burn lines on the walls? Any of these may be an indication that you will want to elevate lighting to an “A” level project on your list. When evaluating the condition of the electricity, look at the fuse box. Fuses can be purchased by the box at the local home improvement store and are relatively easy to replace, but they are still an important detail that is often overlooked. When considering the condition of the plumbing, check for leaks around faucets, toilets, bathtubs, and showers. These might not necessarily be indications of a large problem, but you will still want to resolve them. A leaky faucet, for instance, may simply need a washer replaced. This can be done in a matter of minutes from a kit that can be picked up from your local home improvement store for a nominal amount of money. Sometimes small leaks around toilets, showers, and bathtubs can be resolved with re-caulking. However, if a small lake forms every time the toilet is flushed or the shower is turned on, it probably means there is a much bigger issue that needs attention. Likewise, look at the exposed pipes. If there is a lot of rust, that could mean that the plumbing is outdated and needs replaced altogether. This can be rather expensive and somewhat time consuming. It is also a good idea to determine the source of any water stains on the ceiling. Are they the remnants of a previous problem that has long since been fixed, or are they a clue to a much larger problem? Whether they are large or small, it is important to address electrical and plumbing issues properly. Even a small leak around a sink may shake a buyer’s confidence by thinking that great paint and floors are only a cover up for shoddy craftsmanship underneath.

Next, take a close look at the floors. Aside from outdated, worn, or stained carpet, be on the look out for warped floorboards or cracked tile. When you are considering pulling up carpet to refinish hardwood floors, be sure to evaluate the condition of the floors to determine if they are in a suitable condition to sand, buff, and re-stain or if it would be better to replace them completely. In rooms in which you plan to replace carpet, take stock of the condition of the sub-flooring. Does it need to be replaced as well? In the instance of damaged tiles, be careful when you contemplate replacing just one tile, particularly if the existing tile is rather old. Even though you may be able to match color and design, the natural aging of the old tile may cause your new tiles to stand out like sore thumbs. If there are areas in which you are considering swapping carpet for hardwood or linoleum for tile, if the condition of the existing flooring is otherwise okay but you are unsure your budget will support the change, put those decisions on hold until you have evaluated the remainder of those issues which are crucial and should be made “A” priorities in your project. One exception to this is carpet that is found in either the kitchen and/or bathrooms. Even if this carpet is in good condition, the vast majority of homebuyers prefer some type of non-carpeted surface in these areas, so these areas should be placed on the “A” list, regardless of the condition of the carpeting.

Now, venture back outside and look at the exterior of the home. If it is natural brick or stone, chances are you have gotten very lucky and will not need to refinish the exterior of the home. Sometimes, small issues, such as cracked or missing bricks, will require that a small number of bricks be replaced. The problem is that, like clothing designs, certain styles of bricks are sometimes discontinued. We encountered this problem when we built an addition on to our thirty-year-old home. Finding a close facsimile proved to be somewhat of a chore and when we did find a design close enough to our original to use, when the addition was first completed, there were some obvious differences in aging. It took a couple of years for the new bricks to catch up to the old in appearance, which may prove to be an issue to potential homebuyers who will be seeing the freshly finished product. If the exterior of the home is wood siding, what is the condition of the paint? If it is chipping or bubbling, it is probably time to replace it. If the house is constructed of vinyl siding, you will probably need to replace the siding rather than paint. This could be either good or bad. The good news is that if just a patch of siding needs replaced, this is a lot less expensive than having to replace the siding on the entire house. However, some issues you may run into with this, particularly in older houses, is that the specific color of siding that was used on your property is no longer manufactured or, if it is, it will not be an exact match once it is installed next to the existing weathered siding. Color is also important. Although some would classify this as purely cosmetic, the fact of the matter is that curb appeal is a very important factor to those searching for a home. The bottom line is that if the outside is just not that appealing, it is probably a good idea to rethink the exterior.

Also, consider the driveway. If it is concrete, are there cracks or holes in it? If there are, you should consider having a new one poured. If there are significant cracks in the existing driveway, consider the layout. Some driveways crack because they are laid out in a way for which the ground has not been sufficiently structured to support the concrete. Making a slight shift or ensuring that the new concrete contractor properly prepares the ground will insure that the new driveway stays intact. If the existing driveway is stones or pebbles, have it paved. Not only do buyers prefer finished driveways, but the paving also adds to the curb appeal of the home by giving it a more finished appearance.

The entrance leading to the front door is also important. If it is a sidewalk, are there cracks? If there are, you may want to consider having it repoured as well. If it is stone, check to make sure that there are no missing pieces and that the spacing is sufficient not to feel awkward.

Look at the windows from both the inside and out. How long has it been since they have been replaced? It is recommended that windows be replaced about every twenty-five years. That means that if the property is forty years old and the windows have never been replaced, you should figure the cost of new windows into the project. Although many will argue that this is not necessary if the current windows are in good condition, not replacing windows can lead to the overworking of your heating and air conditioning units, which means an escalated electric bill. Though you may be able to slip this detail by at least half of potential buyers, those doing their homework will inquire about the average monthly cost of electric and heating for the property. If the number you give is significantly higher than comparable homes in the area, inquisitive buyers will immediately sense an underlying issue. They may not immediately make the connection to old windows, but they will be able to figure out that resolving the problem is probably going to cost them a significant amount of money.

If the glass in the window is broken, the entire window most likely will not need to be replaced, only the glass pane. This can be done relatively quickly and inexpensively. Windows and doors also need to be lubricated about once a year, so even if the windows and doors of the property are in good condition, figure the time and costs of lubricating them into your budget. This is going to be a rather nominal cost equal to that of a few cans of WD-40.

Now explore the lot. Are there any major problems that must be fixed? Does the house need landscaping? Does the back yard resemble a prairie reserve? Is the fencing falling down or missing sections? If so, you should plan to correct these problems. Although it is not mandatory that the landscaping of a home look like a cover photo from a home and garden magazine, it is a crucial selling point. Many neighborhoods actually have specific bi-laws concerning landscaping, so be sure to check them for the one in which the property is located. Some guidelines simply required the perimeter of the home be landscaped while others actually specify specific materials that may be used. To develop an educated estimation of the level of strictness in your area without going to check records, simply take a drive around and pay close attention to the landscaping. If all of the designs and flowers are similar, chances are, your newly acquired property is in a neighborhood with restrictive guidelines. However, if the landscaping is pure luck and runs from one end of the gamut to the other, there probably are not many, if any, rules governing the area and, if there are, they probably are not being enforced. Landscaping restrictions tend to be most common in either planned or historic communities, as well, which is another good rule of thumb to consider when making the determination.

Back inside the house, evaluate the appliances. Harvest gold, burnt umber, and avocado green pretty much went out of fashion when the seventies ended, so if the appliances in your newly acquired property are any of those colors, you should definitely plan to replace them. For those homes that have either been built or undergone some type of kitchen renovation since the 1980s, however, the decision may be a bit more difficult to call. The average life of most kitchen appliances is actually 14-16 years. So, start by establishing how long it has been since the appliances have been replaced. Age alone could be your deciding factor here. Remember, “A” list priorities are those things which have to be done, not that you would like to do. Although stainless still is somewhat en vogue right now, it is important to determine whether the budget will support stainless steel appliances in relation to other improvements that must be made before you decide to gut the kitchen. Also, look at the countertops. If they are designed to match the harvest gold, burnt umber or avocado green appliances, you will probably need to replace those too. Likewise, if they are old and significantly scratched and dented, it is probably time for new countertops. The kitchen cabinets are also an important consideration. If they are in relatively good condition, then even if they are ugly, you may not have to replace them. Sometimes painting or sanding down and re-staining old cabinets and replacing the old hardware with new are sufficient updating for sturdy cabinetry. If you would like to replace the cabinets but are not yet sure if your budget will support completely replacing them, put them on your “B” wish list and finish evaluating your “A” list priorities before making a final determination. If your budget will not support completely changing them, it may be possible for you to reface the existing ones. This is a cheaper option that may be a good compromise.

When you finish evaluating the kitchen, move on to the bathrooms. What are the conditions of the tubs and showers? Do they need to be completely replaced, or would a good scrubbing restore them to like new condition? Are they cracked or chipped? If so, you may want to go ahead and plan to replace them, unless they are older pieces, such as claw foot tubs that add architectural interest to the house. In those situations, you may to consider having the tub restored instead of replacing it. Are the toilets stained and worn? If so, it may be time to replace them too. As with the kitchen, if the bathroom cabinetry and countertops are in bad condition, it may be time to change them out as well. However, if they are just ugly, determine how much of your budget will remain after your “A” priorities are resolved before conclusively deciding to change them out. If your funds do not support new ones, it may be time for some creative cosmetic fixes.

After you have determined your “A” priorities, consider the portion of your budget that will be needed for them. In some cases, you may get very lucky, and it will be a very small percent. Other times, almost your entire budget may be eaten by these essential projects. Most of the time, however, there will be money left to move to your “B” list. Your “B” list, as you will remember, are those improvements you would like to make and that will improve the value of the property, but are not threatening the safety or sturdiness of the home in any way. Unfortunately, many flippers, even those who are considerably experienced, fail to distinguish between crucial repairs and those things they would like to do, but are not essential. This mistake is where budgets and timelines go awry. The problem is that it becomes very easy to justify a blow to your budget by telling yourself that it is improving the value of the property. However, it is important to remember that profit was a big factor in determining your budget. Although busting your budget may be adding value to the home, you should be aware that you would eventually, if not immediately, venture into a danger zone from which it will be impossible to recover the total amount of your investment in the sale of the house.

When making your final determinations concerning your “A” priorities, remember to consider aspects that will have an affect on you budget over and above the costs of these repairs themselves. For most plumbing and electrical work, for instance, you are going to have to hire a professional to do the work. Most inspection criteria specifies that installing new wiring or laying new plumbing must be done by someone who is certified in these professions. This is because this type of work must meet certain codes before passing inspection and, in the case of electrical wiring, could be very hazardous to anyone who does not know what he or she is doing. Some regions also require certain work to be completed using specific materials. A professional in your area will already be familiar with these specifications, whereas the typical Do It Yourself guru may not. You will also need to consider things such as permit fees. These are typically not budget breakers but several of them can add up quickly, so it is important to consider their costs. Many areas also have noise or construction ordinances that will prevent work from being done on your property between certain hours or on certain days. This is slightly more important when considering your timeline, but it is still important to your budget. You do not want to have to pay a crew extra money to sit around because you scheduled them to show up at the site to install siding early on a Saturday morning and, when they arrived and began work, a city official was promptly dispatched to inform you that construction is not permitted in your area until after noon on Saturdays.

“B” Priorities

Renovating a house is somewhat like shopping for clothes. Of course, we would all love to stock our closets full of designer labels, but the reality is often that money matters force us to prioritize and purchase at least some of our clothing in much lesser known brands and off the sale rack. The good news about this is that, just as shopping for your wardrobe, this is the part of your project where you get to determine how you want to spend your money. The bad news is that, unlike shopping for clothes, renovating a home is a little less personal, so it is still important to keep buyers in mind when making your choices.

In determining your “B” list priorities, start in the kitchen. This is the one room of the house in which potential buyers will be the most critical, so it is important to be as detailed as your budget will allow. Begin with the appliances. Black, white, or stainless steel are the trends of the day. Stainless steel is the most costly of the three. However, there are different levels of stainless steel appliances as well, so do not automatically assume that option is out before doing a little bit of shopping around. Check unlikely places like local wholesale clubs or local vendors who have a publicly accessible overstock store or section of their warehouse. Sometimes fairly decent deals can be found here. Black and white appliances can be found ranging in everything from budget to high-end price ranges, so if a little bit of browsing convinces you that stainless steel appliances are not in the budget for this project, determine whether black or white would best fit the overall look you are attempting to achieve in the kitchen and start shopping.

Now, review your ideas about the cabinets. How did you feel about them on your first evaluation? If you are happy with them as they are or feel a coat of paint would make them as appealing as replacing them would, then go ahead and save yourself a few thousand dollars by keeping them. If they look like a throw back from the sitcoms you watched as a child, though, it might be a good idea to follow your inclination to change them. One option you might consider, if your budget supports making some improvements to them but not completely replacing them, is refacing. Refacing is simply changing out the fronts of the existing cabinets and is between half and two thirds of the cost of completely replacing the cabinets.

The “B” list phase is the time to review your original ideas about the countertops as well. Granite is the current trend and the most expensive. Corian is also popular and less expensive.

Last but certainly not least on the list of kitchen considerations are the flooring and lighting. Tile and Pergo are most suitable for kitchens. However, when using tile, avoid types that are easily breakable and subject to cracking in temperature changes. Likewise, hardwood is a very common flooring option throughout entire houses, but it is not recommended for the kitchen. The kitchen is usually a high traffic area, so it is important to make sure that the flooring is durable and easy to clean. Hardwood does not stand up well to heavy foot traffic and tends to bubble or warp when it gets wet. Laminate flooring is a good alternative if you want to achieve the look of hardwood with a durable material.

Kitchens should also have plenty of lighting, so make sure things are bright. Small details, such as under-cabinet lighting, can be done inexpensively and go over well with potential buyers. Make sure the kitchen is well lit, but soft. Avoid fluorescents. Lighting that is too stark and powerful will make the kitchen seem more like an institutional facility and less like a comfortable room in the home. Buyers tend to look for kitchens that are warm and inviting, so consider your lighting when making your choice for the paint color.

Finally, do a walkthrough of the kitchen to determine if anything about the layout could be changed in order to make it more user-friendly. Are the major appliances in the right places in relation to each other? Is there a natural flow to the way in which the cabinets are arranged? If anything about the setup is awkward, now is the time to budget that change. Although it is not necessary to go to extremes in renovating the kitchen, between a third and half of your remaining budget after your “A” priorities have been determined should be used to make the kitchen as spectacular as you possibly can.

After you assess the kitchen to determine the “B” priorities that you would like to make a reality during improvements, it is time to move on to the bathrooms. Kitchens and bathrooms can, and often do, sell houses. Therefore, it is important to consider these two rooms. If there is more than one bathroom in the house, start with the master bathroom. If there is no master bathroom, start rethinking the floor plan to determine if there is any way that you can steal some space to create one by either repurposing another room, knocking out a closet or pantry wall, or reclaiming space within the master bedroom. Most contemporary homebuyers strongly prefer a master bedroom with a private bathroom and will often pass over homes they otherwise love in order to have one. If the master bathroom in the home has the space or if you can make it, large soaking tubs, garden tubs, and spa tubs are very popular. Separate tubs and showers are also popular, although often not essential.

If the cabinets are old and outdated, now might be a good time to replace them. In today’s market, a couple of options exist to make this renovation more budget-friendly. A current trend is using stand-alone furniture pieces. Capitalizing on this trend allows you to shop around for a piece of inexpensive furniture to place in your bathroom while still making a very fashionable addition to the bathroom. The second option, if your kitchen cabinets are somewhat neutral, is to slip some extra cabinet units into your kitchen order and place them in the bathroom. Not only can this option save you a bit of money, but also it provides uniformity to the look of the house that many people find appealing. Most people prefer double sinks in their master bathroom, as well, so if the current fixture has only one sink, you may want to consider replacing it with one that has two.

Flooring is very important. Carpet is a no-no. Tile is extremely popular. Laminate is less popular but a viable option. One material you should never consider installing in a bathroom, however, is hardwood. It will never be able to withstand the moisture. If the existing flooring is tiled and you plan to keep it, check the grout over. You may need to be regrout, which is actually relatively simple and a lot less expensive than completely retiling the floor.

Lighting should also be adequate. Most people prepare themselves to greet the world in their bathrooms, which means that the lighting should be bright enough to show the imperfections in a person’s complexion when she first looks into the mirror in the morning, but soft enough for them not to show when makeup is appropriately applied.

After the kitchen and bathroom, you may want to consider the existing storage space in the house. Are there adequate closets? Could the house benefit from a bit of space re-appropriation in order to create a couple more? Storage space is key to most homebuyers today, and the lack of it can be a deal breaker.

Next, consider replacing things that are outdated, such as wood paneling and carpet. Some other details that are often overlooked but can significantly improve the appearance of a home are hardware, light fixtures, ceiling fans, and light switches. All of these can be replaced rather inexpensively, and they can instantly give an updated appearance to an older home.

Flooring often makes the top of many renovation wish lists. Although there is no dominate preference among homebuyers, some will prefer carpet, while others hardwood, it is worth noting that solid flooring surfaces such as hardwood and laminate are more neutral, allergy friendly, and stronger than carpet. Although it is more expensive to install hard surface flooring, it is usually a better long-term bargain for the buck. On average, carpet will need to be replaced approximately every five years in high traffic areas of the house. However, hardwood and laminate flooring will easily last for three to four times that long. Pergo flooring is practically indestructible. A good way to please most homebuyers and still rein in the budget is to install hard surface flooring in the common areas and carpet in bedrooms. Since there is generally a lot less foot traffic in the bedrooms, carpet will endure longer there than in heavily treaded rooms. Because you split the house between a hard surface and carpet, if potential buyers prefer one or the other, they will be able to make the conversion a lot less expensively than having to do the entire house, which will be a lot less overwhelming, both financially and mentally, to them as they are touring and considering the home.

For existing walls, paint will often do wonders. Although most home interior decorating professionals will tell you that priming is necessary, it is actually only necessary when you are repainting dark walls. For instance, if you want to change the wall color of a room that is currently red to yellow, then you will need to prime the walls. Otherwise, it will take several coats of yellow paint before the red will cease to bleed through, and even then the color might be somewhat diluted. However, if you are changing a wall from a beige or tan color to yellow, primer is not necessary. You will probably have to paint two coats, but any dilution that may have resulted in the coloring will be eliminated in the second coat of paint. In addition to paint, adding molding to a room is another inexpensive way of instantly improving its appearance. Although cutting the edges of the pieces so that they properly fit together is a skill that is acquired through a bit of practice, molding is feasibly a DIY project, if your budget is starting to get a bit tight.

Outside, consider the approach to the house. For instance, if the house is on a hill, are there steps leading to the front door or will visitors be forced to approach the house by walking up the driveway? If this is the case, you may want to consider adding steps leading to the front door. They will make the house seem more welcoming and add curb appeal.

“C” Priorities

In a perfect investment world, after you decide on all of your “A” and “B” priorities, there would be enough room in your budget for “C” priorities. “C” priorities are those projects that investors would like to do, but are in no way detrimental to the value of the home if they are not done. Although these types of projects will often add to the value of the house, they are seldom supported in the renovation budget of someone who flips houses for a living and are not typically standard features in other homes in the area. Often, they are improvements that homeowners can and will do when their budget and needs accommodate them. Simply put, they are features that are nice to have, but are not necessary. However, some examples are being included here, so that if you are ever blessed with unlimited resources, you may consider doing them as part of your project.

Once again, though, I want to caution you again against that danger zone of investing more into the house than what you can realistically expect to get back out of it. Always keep in mind that a $300,000 home will almost never sell for $300,000 in a neighborhood in which the average-selling price is $150,000-$200,000. Most buyers who are interested in a $300,000 home are going to prefer to purchase in an area in which the general flavor and character of the neighborhood reflects that higher standard. As the cliché states, most retail home shoppers would prefer the worst house in the best neighborhood over the best house in the worst neighborhood. So do not just assume that because you put $50,000 more work into a project and theoretically improved the value of the home by $100,000 that you will get that out of it, if that investment makes the final price of the out of line with the general price range of houses in the area.

Some outside improvements that may be attractive amenities include decks and patios. Although decks can be a DIY project, they often require more time and money that your project budget can handle. Since a deck is a feature that many homeowners would like, but is not typically a part of all houses, this is a “C” priority.

Finished attics and basements are another great example of “C” priorities. The extra finished living space is a great feature that can add considerably to the value of a house. Nevertheless, it is often a luxury, not a requirement. The exception to this rule may be when you are working on a particularly small house, and refinishing an attic or basement space could mean adding an extra bedroom. In that instance, you will have a very good chance at recouping your money and this typically “C” level project would be more of a “B” level one. Keep in mind, though, that many zoning codes will require a basement to have a separate accessible entrance before the space can legally be added as living space to the total square footage. Many homeowners bypass this because the door is not a legal requirement. If you plan to advertise the space as part of the total square footage of the home or if you plan to market the space to homeowners, you may need to add one. Depending on the layout and positioning of the house, adding an entrance can be almost as expensive as finishing the basement space. However, if you simply think that finishing the basement would be great because the addition of a game room, exercise room, and wet bar would be great, you should reconsider. Although you are probably right and those features would be great additions to the house, adding them may end up costing you more than the value you will be adding.

Swimming pools, basketball courts, and tennis courts are also all “C” priorities. Not only are these unnecessary expenses to your budget, but they can actually detract from it, because while they will appeal to some potential buyers, they will be considered liabilities by others, which means you can considerably limit your potential buyer market by adding any of these features. If a property already has a pool or a tennis court when you purchase it, however, and it is in decent shape, it is acceptable, not to mention usually the most economical route, to clean and refinish it. However, they typically should not be added to a property, if they are not already there.

Fencing often straddles the various priority lists. In most places, it is a “C” priority list. It is nice to have, but not necessary and is something that the future owners of the house could add if they do feel that it is needed. However, in a handful of places, some sort of fencing is required, in which case it jumps from a “C” to an “A” priority. In my neighborhood, for example, not only is fencing required, there are stipulations regarding the type of fencing that can be erected and the height that it should be. It is a good idea to either ask about or check for these stipulations before you buy a property, particularly if you happen to notice that every single house in the neighborhood has a fenced in yard. Sometimes, too, you may purchase a home in a neighborhood particularly known for its family friendly atmosphere. In this case, a fence may be a “B” priority. It is not required, but it will definitely appeal to parents with children.

Once you have determined your priorities and the effect they will have on your budget, you will have a clearer picture of what work you will be able to realistically do yourself and what projects you will need to seek the services of a contractor to complete.

Contractor Versus DIY

In the excitement of earning a large profit, it is easy to think of yourself as a DIY guru. The harsh reality is that sometimes it turns out to be well worth the money spent on a contractor in the long run. When evaluating the work your property needs to have done, be honest with yourself about your budget, timeline, and the time you have to commit to the project. If you have two days in your timeline to install new kitchen cabinets and you have never installed them before, it is a good idea to consider whether hiring someone to install the cabinets for you and complete within your timeline will ultimately be less costly than the damage you will cause to your budget through the disruption of your timeline. It is also important to check with your local officials to determine if the services of a professional are required in order for certain work to pass inspection. We once built an addition on to our house, for example, which required some new electrical wiring. One of the mandates for new wiring to pass inspection in our area, however, stipulated that all new electrical wiring must be done by a licensed electrician. In this case, DIY was not even an option. Checking for these types of regulations rather than making assumptions can save you a lot of money by avoiding the costly mistake of paying once to do the work yourself and then again to bring in a professional.

Another aspect of hiring a contractor that you may want to consider is the commitment a contractor can make to you. When interviewing potential contractors, ask them how many other jobs they will be doing while working on your project. If they clearly have a full plate, then no matter how good their reputation is, you may want to look elsewhere for a contractor who is not over committed. Contractors who take on more than they can handle can extend your timeline way beyond what you originally projected and end up costing you a lot of extra money in the end.

Before you even begin to interview contractors, you must have some idea of how much you should expect to pay for services. It is not wise to assume that contractors are quoting a fair price to you. It is also important to appear at least somewhat knowledgeable when speaking with prospective contractors about a job. Although not everyone will take advantage of you, dishonest ones will begin to build up services and fees when they detect that you are completely unfamiliar with the work that must be done. In the end, you end up paying, quite literally, for your lack of knowledge. However, this does not mean that you must take a crash course on becoming a home improvement expert. Start by browsing your local home improvement stores. Without even speaking to anyone, you will be able to form a good idea of what you can expect to pay for parts and supplies. Many of these stores also offer free instruction in a class setting for such projects as installing ceiling fans, laying floors, and painting, if you have the time to invest. Visit your local library or bookstore and peruse books on the subject. It is not necessary to read them cover to cover, but browse through them and read sections that specifically apply to work you will need to have done. Explore the topic on the Internet. Countless Web sites and forums are available on the Internet that will give you a good idea of what you can anticipate your costs to be. Friends or family members who have had similar projects done to their homes are also a good source of information. Once you have done a bit of homework and acquired to have enough knowledge about what you should expect, then you will be ready to interview prospective contractors. In general, you can expect $1 in material cost with $1 in labor costs. This is a conservative estimate but, again, over budgeting and discovering that you will have a little left to do an extra project is better than discovering that you have run out of money with a project still left untouched.

Determining what type of contractor to hire for a job can sometimes be half the battle. If most of your work is going to be professionally done, you may want to consider hiring a general contractor. This will save you a lot of time and headaches because a general contractor assumes the responsibility of organizing and overseeing the general project and often subcontracts all of the side work for you. Hiring a general contractor for a construction project is somewhat on par with hiring a bridal consultant to assist with your wedding. It is still your show and you still are in charge, but you have someone to guide you by telling you what you need to do next, where you need to go to do it, and to be your representative in the negotiations.

If you are a DIY fanatic and intend to do most of the work yourself, then a general contractor may not be necessary, but you will still have to arrange for professionals to complete that work which even the best home rehabbers should not attempt on their own for either safety or regulatory reasons, such as electrical issues. This means that you are going to have to hone those project management and organizational skills. A common trap for many DIYers is that they believe because they are capable of doing the work, then they will have no problem flipping a house. Although being able to do many home renovation projects yourself will come in handy, it will not help you properly schedule and plan. That administrative work requires a very businesslike and less hands-on approach. Before you even pick up a hammer, you are going to need to know what you are going to be doing, how long it is going to take you, and how it relates to the work that will need to be completed by professionals. Then, you will need to schedule those individuals. This also means that you are going to have to stay on task as well.

If you plan to do any work yourself, there are certain tools and supplies in which it would be wise to invest and have on hand for your projects. Although you can rent equipment, repeated rentals can become expensive, and tools will pay for themselves when you consider the price of multiple renters. Begin with a basic toolbox:

• A 16 oz. all-purpose hammer. There are many different types of hammers of varying weights and hammers. A 16 oz. hammer is good middleweight and size and can successfully be used for many different tasks. However, if you determine after getting started that you will be doing a lot of construction work yourself, you may want to consider adding other hammers, such as those used for cabinetry or framing, to your collection.

• A tape measure that measures at least twenty-five feet. Although the width of the buckle is relatively unimportant, it is a good idea to keep in mind that wider buckles will allow you measure longer lengths without buckling.

• A level. A level is a must, particularly when doing projects in older homes that have settled and, therefore, are more likely to have uneven floors or walls. At minimum, your level should be a three-foot level.

• A miter box and backsaw. A miter box is the device used to cut trims and crown molding. Even though installing molding is an inexpensive and relatively easy task for most DIYers to master, a miter box makes it even more efficient and relatively full proof.

• A chalk box. For all of you weekend warrior rookies, a chalk box is that infamous blue line tool in which you stretch the string to make a line and then snap it. The impression of a blue chalk line is left behind. Quite simply, this tool keeps lines straight.

• A handsaw. Although electronic saws have made handsaws almost obsolete, these handy tools still come in handy when you need to maximize your control over the cut being made.

• WD-40. A few squirts of this handy product will make even the squeakiest doors and windows open and close with ease.

• A multiple bit screwdriver. This type of screwdriver has different types of bits that screw on and off, which makes it convenient for do-it-yourself projects. However, as with the hammer, if you decide that you may be doing a lot of construction projects yourself, you may want to consider investing in an actual screwdriver set for longevity and more precision.

• An adjustable crescent wrench. Buy both a smaller and larger one. Certain projects will call for each.

• A cordless drill. A cordless drill packs power and saves a lot of time, frustration, and muscle. It also does double duty as both a drill and a screwdriver. You will find yourself reaching for this tool frequently, so invest in a quality one. It is also a good idea to invest in a basic set of drill bits and driver heads as well.

• A few extension cords and at least one surge protector. Most power tools come with either four or six-foot cords, which can prove to be a bit frustrating when you are working in a twenty-foot room with one outlet on the other side of the room from where you need it to be. An extension cord is an easy way to remedy this problem and save you a lot of frustration. Since the electricity in many older houses can be a bit temperamental if the house has not been rewired or updated in a long time, particularly when it comes to the usage of power tools, a surge protector is also a very inexpensive way to avoid a big headache.

• A tool belt or apron. Although these items may seem hardcore, you will get tired lugging tools around and having to continuously stop what you are doing or climbing up and down ladders in order to switch out or retrieve tools. A tool belt or apron allows you to keep everything within reach and switch out with ease.

• A pair of tile cutters. Before all is said and done, you will have the art of cutting tile mastered. Although you can rent tile cutters from your local home improvement store as well as a tile shop, purchasing a pair of your own will be well worth it. Since successfully cutting tile is highly dependent upon recognizing a specific feel, having your own set of cutters saves you the headache of having to familiarize with the way a pair of tile cutters handles every time you begin a new tiling job.

• A tile saw. Like the tile cutters, this can be rented. However, it is much more convenient to have your own tools when you will be doing frequent tiling jobs on your own.

• Several large plastic buckets. These buckets can be used for everything from mixing paint to filling with water for mopping and cleaning to storing tools.

• A set of pliers. Pliers can be used to cut wires and thin metal.

• Eight and sixteen foot ladders. The eight-foot ladder is ideal for most indoor projects, and the sixteen-foot ladder will serve most outdoor needs. Make sure you invest in sturdy ladders that lock into place.

• A caulking gun. Although you can save the hassle of purchasing caulking guns in bulk for large projects, it is always a good idea to have one on hand for smaller projects and repairs.

• A device for measuring angles. Although the official tool of the construction world is a speed square, a good old-fashioned protractor from the office supply section of any supermarket works just a well in a pinch.

You will find that as you become more skilled and enjoy doing some projects more than others enjoy, you will begin to amass tools that are more specialized. You will almost certainly purchase an electronic saw at some point. Some people who are particularly fond of painting will purchase high powered paint machines while others prefer electronic nail guns or carpet cleaners. After doing a few projects, you may find that even though tiling is a perfectly doable task for the average do-it-yourselfer, that you just do not enjoy it and would rather hire a contractor to do tiling jobs in order to free up your time and energy to do other projects. To this degree, the remainder of your toolbox will depend upon your personal likes and dislikes, as well as whatever project you may be doing at the time. However, the above list of items will give you a good base of tools to keep on hand for practical purposes.

Many people who are somewhat adept at do it yourself projects decide to pursue a career in flipping, because they assume their home improvement expertise makes them ideal for buying and renovating properties. However, the actual rehabbing is only part of the real estate process and the construction itself an even smaller part. Although your building and decorating skills may help you, your business will not be successful if you concentrate only on that part and neglect the other tasks that must be done. If you enter the world of buying and selling houses for the sole benefit of being able to renovate houses, because it is something that you like to do and are good at, consider finding a partner to assume the administrative aspects of your business if that is an area in which you are weak or have no interest. This will ensure that your priorities remain balanced and increase your chances of success. Ultimately, this may affect your profit, but the cons balance in guaranteeing your ability to complete the current project and securing future ones.

If you have ever purchased supplies from a home improvement store, then you are also aware that, once the supplies are bought and paid for, there is the issue of transporting them. Obviously, you might be able to put a few cans of paint and other smaller, miscellaneous supplies into the back seat or trunk of a compact car, but lumber, doors, and large boxes that contain fixtures, ceiling fans, or other objects can be somewhat of a problem. Some home improvement stores have a rental truck or trailer available for transporting these materials. If you plan to do a minimum amount of work that would require larger supplies, such as lumber, this may be the most sensible option, because you will only need a vehicle in order to transport your supplies and materials occasionally and for a brief period of time. However, if you will be doing a lot of projects yourself or will be in the habit of furnishing your own supplies or materials, you may want to consider trading in your small, fuel-efficient car for a larger truck or SUV that is capable of hauling larger, heavier items on a regular basis. Although your payments will be higher, they will pay for themselves in the trade off of not having to pay repeatedly to rent a vehicle to transport your home improvement store or gardening center purchases. Additionally, if you should decide to purchase a vehicle for your investment and flipping business, the IRS currently allows tax deductions for automobiles purchased solely for doing business, so it will be possible to recoup some of your additional expenses at the end of the year in the form of a hefty deduction.

Creating a Timeline

Once you assume a property, do not spend a lot of time just sitting on it. Have a plan of entry ready. Once the house is yours, move in, and get going. Aside from a basic timeline, prepare to have a dumpster delivered as soon as the closing is over. You may actually want to arrange for this prior to the closing. Then, clean the house. Literally, go through, clean, and gut it. Get rid of any garbage inside the house, outside the house, around the house, or on the property. If the house has not been occupied in quite a while prior to your taking ownership and the yard and landscaping are particularly overgrown, go ahead, make a few passes over the lawn with a mower, and begin doing some pruning. Clean the outside as well as the inside.

A common mistake of countless rookie flippers is drastically underestimating the amount of time it will take to renovate a piece of property. It is easy to get swept up in the idea of a fast, easy profit. Nevertheless, undervaluing necessary work in one’s imagination will not lessen the amount of repair and improvement a project needs in reality. Take the time to design a timeline that is realistic to your budget and the amount of work that must be done. Budgeting too little time is essentially the same as not budgeting at all.

When creating a timeline for your project, budget more time than you think you will need. Finishing a couple of weeks ahead of schedule is usually preferable to finishing a couple of weeks behind. Also, when creating your timeline, be sure to make the appropriate adjustments for DIY and contract projects. A professional painter, for instance, will be able to paint the outside of the average 1,500-2,000 square foot house in 6-8 hours. For the average weekend warrior, though, it will probably take twice that amount of time.

Another thing to consider is the progression of the work. If you will not be occupying the property, then it will be possible to have work simultaneously taking place in all parts of the house, since no one’s lifestyle is being disrupted. However, if you will be living on-site while renovations are taking place, this is a bit trickier, and chances are, it is going to take somewhat longer to complete the project because of the logistics. You are more or less going to need to divide the property into quadrants and schedule the work so that it occurs in one (or two if you have a smaller family) quadrant at a time. You will live in the other quadrants, in the meantime, and then shift when the time comes to work in the remaining quadrants. This usually involves not just the mere movement of people, but also the movement of personal items, tools, and supplies, which takes time.

If the kitchen will be renovated in a property in which you will be occupying during renovations, either begin or end with it. Since the kitchen is usually the most essential room in the house, you will need it in working order for the majority of the project. If the kitchen is in good working order when you move in, save it for last. If there are some essential repairs that must completed, begin with those. In general, a rule of thumb that seems to work well is to figure fifteen minutes of labor hours for every square foot of space, assuming that you are renovating from floor to ceiling and that there are no extensive projects, such as redoing plumbing or rewiring electricity, that need to be done. This means that you should expect to spend about fifty hours working on a two hundred square foot kitchen. Keep in mind that not all of this work will be labor intensive or require the work of a professional. This includes small projects such as changing out the hardware on cabinets, cleaning, etc.

You will need to have a serviceable bathroom throughout the duration of a renovation, which can be tricky if there is only one bathroom in the house, and it needs repairs. If you plan to add a bathroom to the property, budget the time to do that first. Then, you will be able to use the new one while the old one is being renovated. If the existing bathroom will remain the sole one in the house, chances are that there is not going to be any way around your being forced to either check into a hotel or stay with a friend or family member for a couple of days. Of course, if the bathroom is more or less in useable condition and you have not budgeted any major projects for it, then this will be somewhat of a non-issue for your timeline.

When you create a timeline for a house that you will be occupying during construction and divide it into quadrants, be sure that the quadrants are large enough to provide appropriate living space for your family. Two people can feasibly live within the confines of two rooms for a couple of weeks, for instance, but a family of five cannot. The stress of being forced to live in cramped conditions for an extended length of time combined with the tension of living in a construction site that is constantly being invaded by strangers and workers can become too much for many families, especially those with younger children or teenagers. Therefore, it is important to give your family enough space to be able to separate, if not spread out, and a place where everyone can blow off steam.

Another important aspect of your timeline, if the property is one that you will not be occupying during renovations, is the burden of the additional mortgage. How long can you realistically afford to pay two mortgages before you find yourself in financial trouble? If it is imperative for you to have the project completed and finished before the first mortgage payment is due, then you are going to be working under a considerably more restrictive timeline than someone who can afford to make a mortgage payment or two before the budget starts to get tight. However, it is important to consider the amount of time you will need to complete your projects. Is it realistic to expect that everything can be completed before the first payment is due? If not, then you should start reorganizing your finances now and make the appropriate adjustment to your timeline. It is better to plan enough time and expect to make the first payment, than to proceed and hope for the best only for your goals not to be realized. You will find yourself dealing with a lot less stress, too.

When creating your timeline, be sure to verify with your contractors that they can complete the work within the dates that you have specified. Many contractors will give you a quote with a time frame, only to pick up additional work between the time you first discussed a project with them and the time your work begins. When you talk to them, be sure you specify any restrictions, such as noise ordinances there may be in your area that may affect their ability to work. The only way for them to give you a fair assessment of the time it will take them to complete a project is for them to know what obstacles may prevent them from delivering. If you do not give them this information and they are unable to complete their work within your timeline because of it, it is your fault not theirs, because you are the project manager. You are responsible for making sure all parties involved have all pertinent information.

When budgeting time for your DIY projects, be sure to allow a margin for error. Even the most seasoned do-it-yourself experts make mistakes. It is completely natural and expected. Since you are not a professional who does this type of work every day, you will be susceptible to the occasional inaccurate measurements, misjudgments, and all-out bad decisions. Using caution and moving at a slightly slower pace will help ensure that these types of errors are minimal in their impact to both your timeline and budget. However, part of successful flipping is realizing that these types of incidents can and do happen and being prepared for them when they do.

While you must consider that every day you hold the property is detracting from your budget, shoddy work and shady contractors can cost you more in the end. Take the time to interview contractors about their experience. Check their references, and get commitments from them in writing. Establish a contractor-specific timeline in your contract for each and every project that you will be hiring out. Not only will this help you stay on track with your budget, but it will also help you coordinate the renovation.

Sample Timeline for a Project
(Assuming a mix of DIY and Contractor work)

	DAY 1	DAY 2	DAY 3	DAY 4	DAY 5	DAY 6
WEEK 1	Appt with kitchen designer to determine new kitchen design and order cabinets.	Disconnect old appli-ances and place in dumpster; remove old counter tops and vanity; remove ceiling fans and old light fixtures.	Remove old crown and base molding and carpet; make appoint-ment for electrician to repair all electrical problems and plumber to check bathroom plumbing.	Patch walls, remove outlet covers, and prime over red walls in dining room; make appoint-ment for landscape; edge windows with painters’ tape; wash down all other walls and allow to dry.	Take down old kitchen cabinets; remove old bathroom vanity; clean tile grout in bathroom.	Visit tile and flooring store to choose new tile for front entryway and hardwood for living room.
WEEK 2	Make final decision about paint color. Meet with electrician at 1 p.m.	Apply first coat of paint to walls.	Sand woodwork; apply second coat of paint to walls.	Visit store to purchase new appliances.	Stain woodwork; scrub bathtub and tiles; dig out grout that could not be cleaned and regrout.	Initial consultation with landscaper in the a.m.; pick up new shower in the afternoon.
WEEK 3	Siding contractor set to arrive in a.m.	Install new tub and shower in a.m.; Tour garden center with landscaper in the afternoon to choose stones for flower beds and walkways.	Pick up new tile and flooring; begin laying flooring in living and dining rooms.	Continue laying flooring in bedrooms; landscaper arrives to begin digging up old yard and laying sod.	Begin re-installing crown molding and trim; install new light fixtures; visit home improve-ment store to purchase new hardware for bathroom and kitchen cabinets.	Kitchen cabinets to be delivered by noon; plumber coming to hook up toilet in master bath and readjust pipes under kitchen sink; new kitchen countertop arrives.
WEEK 4	Kitchen cabinets arrive in a.m.; paint bathroom.	Landscaper planting flower beds; contractor installing new kitchen cabinets and countertop.	Lay kitchen floor and begin tiling front entry way; new appliances being delivered in p.m.	Grout front entry; install new appliances; begin cleaning and packing away tools.	Hang new house numbers; install new kitchen and bathroom hardware; landscaper installing new walkways.	Clean all floors and wipe down all new cabinets and counter-tops; clean windows and mirrors.

Always remember that a timeline is a live document. Chances are, you will need to make some adjustments and that most projects almost never go exactly as they are initially laid out on paper. The idea is that you have a well thoughtout plan of execution and that you have considered each action that must be completed before beginning the next. Notice, too, that the above sample is based only on a six-day week. If you happen to purchase property in an area that does not at least restrict construction to specific hours each day, thereby limiting the amount of work you can complete on a daily basis, you will find that you will still need at least one day out of each week to rest and recoup from the events of the week. You will also find that many contractors will charge a premium to work on weekends, and many will not work on Sundays at all. Of course, large projects will call for bigger and more detailed timelines, but the principle is still the same.

Taking Ownership of a Property that is Currently Occupied

At some point in your career, you may take ownership of a property that is currently occupied. In every state, existing tenants have legal rights, unless you have assumed a property in which the tenant is the previous owner on whom the lending institution foreclosed. In that situation, the occupants are merely squatting. It is important that you understand the rights of existing tenants prior to serving them notice of your intent for the property. If possible, only evict if you have to. If you can, work around existing occupants until their current lease expires. It is usually in the best interest of everyone involved. In many cases, if you have taken ownership of a building that is already a multiple unit building, such as an apartment building, you will have to give the existing occupants the first option to buy. If you cannot work around the existing tenants of a property that you intend to renovate, it is ethical to give them adequate time to relocate. Remember that even though you are now the rightful owner of the property, that property was and is still someone’s home. You may find that, in many cases, most, if not all, of the existing tenants have already begun searching for new homes, because they have been well aware of the developments concerning the ownership of the property as relayed to them either by the previous owner or by their own observation. In those cases, it is very likely that you will not face much opposition to your intentions with the building. Those tenants who have remained have done so with knowledge of the possibility that they may be asked to move and merely made the decision to wait it out on the off chance that the new owner would permit them to stay.

If you do plan to renovate the existing units and sell them, go ahead and give the existing tenants the first option to purchase, whether it is legally required of you or not. This will make them feel as though they are still being valued and give the opportunity for those who ultimately wish to remain in the building the opportunity to do so. Advise them that they may need to relocate for a period of time while you renovate their unit, or if you will be refurbishing the building in segments, you may consider negotiating with them to relocate temporarily to another unit within the building while you work on theirs. Either way, the rate and order that existing tenants vacate a multiple unit building may have an effect on your project timeline, so be sure to keep this in mind when you are planning.

If you must evict, there is a legal process in virtually every geographic region. Most often, you must first give the tenants notice that you wish for them to leave and allow them a specified amount of time to vacate voluntarily. If they refuse, then you can begin the legal process, which usually involves a court appearance during which the tenants are given a window of either thirty or sixty days to vacate before a judge will order the police to come escort them out. Eviction is usually a drawn out and expensive process, so only resort to it when you have exhausted all other forms of recourse.

Another issue you may encounter is assuming a property in which the previous owners have vacated due to foreclosure or eviction but for whatever reason, typically expenses, left behind much of their furniture or belongings. Normally, unless there was some sort of clause in your purchase agreement that stated otherwise, whenever you purchase a home, everything in it becomes yours. This includes any belongings of any previous owners or tenants who may have met with financial trouble that forced them to leave most of their possessions behind, because they simply did not have the money to rent a truck to haul them away by their move out or eviction deadline. Sometimes, you will be approached by these former tenants or owners with a request to obtain their possessions. Although whatever is in the house now legally belongs to you, morally and ethically, it is usually a good idea to give the former occupants the opportunity to remove whatever they wish prior to disposing of the remnants yourself. Again, it must be emphasized that when a situation like this occurs, chances are that the previous owners or tenants have already experienced some level of misfortune that have stripped them of some amount of dignity and left them in an unfortunate situation. A bit of empathy from the new owner will at least ease their anxiety and lessen the pain of the trauma. You do not have to be an all-out philanthropist, but a bit of empathy can be invaluable.

Rehabbing for the Buyer Market

The essential thing to remember about flipping houses is that you are improving the home to suit potential buyers, not yourself. You may prefer top of the line stainless steel appliances in the kitchen, for instance, but buyers looking for homes in the area in which your property is located may not be willing to pay the added expense for a house with stainless steel appliances. When renovating a home in a neighborhood about which you are largely unfamiliar, look for other houses for sale in the area that are retail quality and attend their open houses. Get a good sense of what amenities houses in the area have. Then, target those same features in your renovation. It is also important to keep things neutral. From floors to wall color, using extreme anything, while it may appeal to some, will significantly narrow your pool of potential buyers.

A big factor in successful renovations is your comprehension of how improvements translate to the homebuyer. Understanding where to spend your money and why is essential. Improvements seldom translate dollar for dollar. In other words, purchasing top of the line appliances for the kitchen may not automatically maximize your potential profit base. If comparable properties in the area have nice, but not top of the line appliances, prospective buyers may not necessarily be able to justify spending the additional cash to purchase your home simply because they can have appliances that they may not value all that highly to begin with.

Understand the market in your chosen area of focus. Tour other open houses to get an idea of the quality of typical homes that go on the market in the area. Of course, as previously discussed, simply investing more money into a property also does not necessarily mean that buyers will be willing to meet your final asking price if it is too far over the standard range for the area.

In today’s real estate market, studies have shown that the most important features that most buyers look for in a house are kitchens, master baths, and closet space. Therefore, it makes sense to focus a large portion of your renovation budget on these three areas. Even if you must skimp elsewhere, allocate about 60 percent of your budget to the kitchen and bath areas, because these are the areas in which your potential buyers will be looking at closely.

Your interior improvements should conform to commonly accepted standards of the day. However, it is not usually a good idea to attempt to overdo what can typically be expected within the neighborhood. Doing so will not guarantee you a return on your investment, which may mean that you will be spending money that could be better allocated elsewhere.

For the interior of the house, hardwood floors, stainless steel appliances, and closet organizing systems are the hot choices of the moment in virtually every neighborhood. Hardwood floors often give the interior of a home uniformity and the illusion of a clean, well flowing space. Stainless steel appliances appear top of the line, even if they are not necessarily deluxe models. Closet organizing systems can make small closets appear much larger by maximizing the amount of useable storage space.

Stick to more neutral colors for paint and tiling. Although you may like bright green walls, many buyers may not, and remember that you are not renovating for yourself. You are making improvements to maximize your profit.

Ensure that the improvements you make are keeping with the style of the house. French country can seem somewhat off in a decidedly Spanish style home. Not only is keeping the renovation close to the original style of a home more aesthetically pleasing, it is often easier on the budget. You can usually save money by working to capitalize on the natural feel of a house.

Curb appeal is another important factor. If the house is ugly on the outside, buyers are not going to be very open to the inside. If your property needs external attention, do not overlook it. Sometimes a house needs only a fresh coat of paint or even new landscaping to improve its curb appeal. Other times, more extreme improvements, such as new siding, are needed. Although residing a house is costly, it can also be worth it. This is the type of issue that should be evaluated when you decide whether a piece of property is a good investment or not. Once you have made the decision to buy, do not go back on your decision in an effort to save a little bit of cash. In the end, it will only end up costing you.

Evaluate the current landscaping layout of the house. Is there overgrowth or a tree that has outgrown the space available for it in the yard? Although large trees can sometimes only seem like pesky obstacles that hide natural light, they can actually cause extreme structural damage if the roots grow large enough to cause cracks in the foundation. Sometimes, in addition to improving a home’s curb appeal, you can actually contribute to its stability by removing large trees that have grown too close to the house.

Avoid loud, bold colors on the exterior of your house. Research has shown that buyers actually respond best to yellow and neutral-colored homes. If you insist upon using fire engine red or electric blue, use it sparingly. Painting the front door is a great way to add a splash of color that does not leave an impression that is too aggressive to most buyers.

Conform to the demographics of the neighborhood. Painting all of the walls white and installing light colored carpet that will easily reflect dirt and stains is probably not a good idea in a family-oriented neighborhood in which most of your potential buyers will probably have small children. People shopping for homes in this type of area are going to be looking for a color scheme that will camouflage stains and dirt and flooring that will stand up to plenty of wear and tear. In short, they will be looking for a family-friendly home. If buyers expect to find family-friendly homes in a family-friendly neighborhood, you should renovate a property to standards that fit into those guidelines, or it may even be detrimental to your ability to sell the property and ultimately affect your profits. You may find that you are forced to lower the asking price in order to attract buyers, because prospective purchasers may not be willing to pay full price for a home in which they are going to have to repaint the walls and lay new flooring, if they even have the time or the desire to do any work at all.

If you are renovating a multiple unit property, be sure to keep some sense of uniformity within the units. Although prospective condo buyers will want some distinctive differences between their unit and the others in the building, they will equally be repulsed by a property in which the units are so drastically different as to appear poorly planned and haphazard. Consider any outdated aspect of the condominiums that should probably be updated. Since many condominiums do not have high resale values, it is important, if you can, to add some sort of perks to the units when you renovate to attract buyers who may not otherwise be interested in purchasing a condo.

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