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With interest rates seeing a slow but steady rise in recent months, now is less of an ideal time to acquire a new rental property. These conditions give the opportunity for a different type of real estate investing strategy to shine though, and that comes in the form of Home Flipping. Flipping is less dependent on interest rates and can still be very profitable regardless of larger market conditions. To really make flipping worth your while, you want to choose renovations that will add the most value to the home so that you can maximize your ROI (return-on-investment). There are also certain upgrades which will have a huge impact on a home’s resale value while costing very little to actually do. Continue reading to discover some of the best upgrades to perform before flipping a home.
Key areas
The first thing you’ll hear when you begin home flipping is to focus on the key areas: mainly the kitchen and the bathroom. This holds true, since the upgrades you make to these rooms have a great ROI and have the most wow factor to potential buyers. An easy way to update the kitchen is to install new cabinets or countertops, and for the bathroom a new sink and new fixtures. You can get more in depth by replacing or updating the flooring in these rooms, and by purchasing new appliances for the kitchen.
The exterior
There are tons of things you can do to improve the inside of a home, but it’s also important not to neglect the exterior. One of the easiest ways to update an older property is to apply a fresh coat of paint, or alternatively you can install new siding. You should pay close attention to the landscaping as well. Your property’s curb appeal is important since it’s the first thing you notice about a home, and it will be on display with the property’s listing. A great looking exterior can have a big impact on your final sale price.
Adding living space
Adding living area to a home is a great way to increase its square footage and entice more buyers into considering your property. Provided there is enough space, an attic can serve as a perfect spare bedroom. And a basement can be converted into a den or entertainment area as a relatively low-cost addition to a home. You can take this idea a step further by adding an accessory dwelling unit (ADU) to a property. This is where you convert extra space like a garage or basement into a second livable unit. It's still part of the same property legally, but in certain states you’re able to rent the unit out separately which can make for a very lucrative addition. Be sure to check your state and local regulations on ADUs before making this upgrade.
The easy upgrades
There are a number quick and easy upgrades you can perform to a home that will really help bring it up to date. Most of them won’t even require you to purchase anything new, rather you are breathing new life into what’s already there. The first thing most home renovators do is repaint the walls with a modern color palette. It’s also very easy to touch up trim around windows and doors so long as they’re in a good enough condition. If you have hardwood flooring anywhere, you should consider sanding and refinishing to make it seem practically new. Finally, you can replace old lighting fixtures in strategic locations with more up-to-date varieties to complete the like-new look.
What to look out for
Just like there are great renovations to perform on a property, there are certain ones that you should steer clear of since they aren’t worth your time. For starters, if a home is in really bad shape or has major structural damage, it’s generally better to stay away since the repairs can eliminate your profit margin. You should also avoid making big upgrades that you’ll have a hard time seeing a return on. Things like an in-ground pool or hot tub would perfect examples of this. When you’re making design decisions, it’s better to stick to ones you know will have broad appeal, like neutral colored paints for the walls. Keeping this info in mind helps make sure the renovations you perform will entice buyers instead of turning them off.
RCN Capital
Are you looking to secure financing for a real estate investment? RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate investors. If you are looking to acquire a loan for a home flip, RCN Capital has competitive loan options available. Connect with us today to discuss your next real estate investment.