Evaluating which additions to make and which additions to avoid on your next fix and flip project will heavily impact your bottom line.
Not every addition made to a property will provide an increased return on your investment.
You want to avoid investing in additions that will bring little to no increased value to your property.
Here is a list of 5 additions to forget when working on your next fix and flip home.
1. In-Ground Pool
In-Ground pools are very costly and complicated. Prices can range from 30k to 75k. You must always focus on your end buyers needs. Oftentimes, families with small children will see a pool as a danger and therefore opt for a safer home for their family, hence reducing your prospective buyer pool.
Pools are also a drawback because of the increased maintenance and higher homeowner's insurance costs.
Unless you plan on staying in the home and using the pool on a regular basis, forget this home addition.
2. Extravagant Bathrooms
While adding a bathroom is a great idea, it is unnecessary and counter cost productive to add a jacuzzi or oversized bathtub. These bathtubs are expensive to install and require maintenance and bigger hot water heaters. All these extra ongoing costs will be a negative to any potential home buyer.
Instead, focus on adding value via making small upgrades to the bathroom fixtures such as the door handles, shower heads, towel rack and faucets.
Note that adding a glass door to your shower is very expensive and can cost anywhere from several hundred dollars into the thousands, and if you are outfitting more than one bathroom this can get expensive quickly. Therefore, we recommend letting the end home buyer decide if they will use shower curtains or install glass doors.
3. High End Landscaping
Cost efficient and affordable landscaping is a great idea to give your home a fresh look, however do not go overboard buying expensive plants and trees. While proper landscaping is a must, it is best to select plants and trees that require little maintenance and will have a long life.
Expensive plants have proven to not add value to a home, so rather than paying for fancy plants, it's best to focus more so on the curb appeal of your home to add real value to your project, like adding a new coat of paint or redoing your walkway.
4. Home Office
Most people have an office they go to on a daily basis and are not keen on working from home. Separating work life from private life is very important to many because it ensures peace of mind. Even for workers without an official office, they have the option of working at cafes and co-working spaces which have skyrocketed in popularity in recent years.
Therefore adding a home office is not of great value to a potential home buyer, but it is a good idea to provide them with a simple desk and chair so people have the option to occasionally work from home.
5. Expanding the Garage
Garage additions can be very costly, sometimes adding up to tens of thousands of dollars. Do not build a new garage for the purpose of adding value to your home.
The only real value you can add here is if you build a small apartment above your garage which can be rented out to create some extra cash flow. Few families have more than 2 cars and therefore don't need more than 2 spaces.
When planning your next fix and flip remodel, be sure to stick to the big money makers like improving your kitchen and adding small bathrooms rather than tackling the unnecessary items on this list.
Be sure you understand your target market of buyers needs and wants. Lasly, avoid doing unnecessary improvements by “over rehabbing” your project and remember the end goal is to build something that will attract buyers.