Flipping Houses

The 5 Best Home Renovations to Increase Your Property Value

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7 Articles Written
contractor-real estate

I want to talk about the five ways we can raise and jack up the value of your investment property, so you can make more money in your portfolio.

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We all know the three ways we can make money in real estate: cash flow, mortgage paydown, and appreciation. That’s the bread and butter of your real estate investing business.

But what if there was a fourth way you can make money in real estate? That’s exactly what I’ll be talking about today.

Here’s how you do it: smart renovations.

Which Renovations Are Worthwhile for Investment Properties?

1. Kitchen

So, the No. 1 thing we want to spend the majority of our money in our budget on is our kitchen—not surprising. That’s the hub of the home. That’s where the most people spend most of their time, which is why we really want to make it nice.

In the video below, I show you some clips of my past projects and kind of what we’re doing, what our style is.

What you want to do is use a light-colored kitchen (at least right now in 2019). That’s kind of what’s happening. We use white cabinets with a light countertop, as well. It’s very modern, very sleek.

If you’re doing a flip, you want to use a stone countertop. We’re also using a white quartz—again, super light, super bright. That’s what’s in right now. That’s what the people want.

It’s also a neutral tone, so it’s not going to offend anybody or turn people off. Everybody kind of likes it, and everybody can design their kitchen around a neutral white kitchen. So, that’s a recommendation I have for you, and spending all of your money here is a great way to really jack up the value.

For example, our average kitchen for a rental property (brand new cabinets, countertops, sink, taps, appliances, etc.) is around $8K to $10K on average. If we’re doing a flip, you know it’s probably about $12K to $15K, because we’re getting better quality appliances—fridge and stove and stuff. We’re spending a little more there, but that’s where the returns are really going to come.

Spending 10 grand in our kitchen, it’s going to add like $20-$25,000 to the value of the property. So, it’s very, very smart to put a lot of money here.

And if you don’t want to spend a lot of money, let’s say you’re redoing a home or you bought a property and your budget’s pretty slim. You don’t have the money to replace all the floors or all the baseboards or all the bathrooms, etc. At the very least, really make that kitchen pop, because that’s how you’re going to get the rental (or if you’re flipping, sell the property).

Spend all your money in the kitchen. Well, not all of it—but a lot of it.

2. Bathrooms

The second place you want to spend it is—again—not really surprising.

The second place a lot of people spend a lot of time in homes is the bathroom. I recommend using double sinks. You’ve heard of his and her sinks—or his and his or hers and hers. Right?

We want to use double sinks. This is what really attracts the buyers and the renters. And again, make that color palette very light.

We typically use a white hexagon floor with a black grout. We’re using white subway tiles around the tub. We’re using a cool IKEA floating vanity in our properties—very trendy, very cool.

That’s the palette we use across all properties (even flips). You can see how important to me it is to have a really nice home.

However, I don’t advocate overspending on a property. But we do a lot on our properties. We always flip our rental properties top to bottom, because we want that high quality tenant.

I want someone who is going to stay and treat the home well. I want a family who’s going to stay for three to five years or more. That’s just my game plan.

I do that by doing these strategic renovations and really blowing my tenants’ minds when they come through the property or they see the property advertised online. I want them to think this house is this nice for this amount of rent?

That’s kind of the game plan. I want to have a boring business. That way, when I’m doing what I love, which is traveling—to Costa Rica, Hawaii, Bali—I don’t want to be getting phone calls from my property manager saying, “Mat, your tenant didn’t pay rent. They broke the toilet. They punched a hole in the wall.”

I don’t have those kind of tenants because of the value of renovations and the types of property we’re buying. Almost everyone in my properties always pays rent on time.

So far, guess how many times I’ve had a tenant not pay rent, I had to evict them, or they screwed me, etc.? How many times in nine years of investing and having 26 properties?

Once.

And it was very, very easy to get them out. It took longer than it should have, but they finally agreed to leave, we got the money, etc.

That was the worst experience I’ve had in the history of my portfolio. Again, it comes down to the type of properties we’re buying and how we’re doing the renovations.

Related: 5 Home Renovation Mistakes You Can’t Afford to Make

3. Flooring

Tangent over. Let’s get back to the third thing you want to spend your money on: flooring. This is also the order of importance, OK?

So, for flooring, I really like seamless floors. Something that’s a huge pet peeve of mine is when there is one type of flooring in the kitchen, another type of flooring in the living room, another type of flooring in the bedrooms, upstairs, etc. I hate that! I like one flooring throughout the whole house. It makes it seamless.

The house has flow. It seems bigger, it seems brighter, and that’s what you want when trying to sell a property or find a tenant. You want to make things look bigger, look better, than they are. So, we use a light-colored floor.

Again, in the video above, I show you some examples of what we do. It is a nice, modern gray floor—looks super real, super cool. It’s actually a crushed vinyl resin. It’s not even laminate. It’s like commercial grade. It is almost impossible to scratch (unless you really want to scratch it).

That’s what we want. We want good wear and tear materials in our rental. That way, they look great after three years, five years, six years. When I want to sell that property, the house should look almost the same as it did when we first did those renovations. So, we’re planning for the future and using smart materials.

As I always say, spend a little more on your materials because the labor is the same. If you buy a cheap, crappy laminate and put it down, it's going to cost the same for your contractor to put it down. If you're deciding between $25 or $30 an hour, if you use a better material, it's the same $25 or $30 an hour.

Spend a little more on the material, make it look cool, and make it stand up to wear and tear.

home-renovations

4. Feature/accent wall

The fourth thing I really like to do for our renovations is use a feature wall. We’re kind of getting into personalizing, which is not always a good idea. But again, we use a nice, neutral modern blue color. It really pops with the color scheme that we have: the light gray walls, the light gray flooring, the big baseboards. With it, that feature wall really pops.

And if my tenants want to paint over it when they move in? Fine!

It still separates my properties from the rest—which is the main reason why I use it.

When tenants are looking through dozens and dozens of properties online for which ones they want to move into or which ones they come and see (maybe even six properties in one day), they can’t really remember which property was what. They’ll remember mine, though, because of the feature wall. It will stand out in their mind of how nice it was renovated.

Related: 4 Painful (But Invaluable) Lessons Learned From a Rehab Gone Wrong

5. Landscaping

The last thing I want to talk about (although I could say a lot more) is curb appeal. A lot of people disregard this.

What’s a cool kitchen or bathroom or nice flooring if the outside looks like crap? You can’t have weeds growing over the windows or have the grass look terrible, etc. You really want to just pay attention. I don’t want you to spend as much as you did on the first areas I pointed out, but still. Pay attention to the curb appeal.

Cut the grass, take the garbage out, pull the weeds that are six feet tall, etc. Don’t spend a lot of money or a lot of time here—especially for a rental property. On a flip, though, we want to spend a little more time. For a rental property, just clean it up right.

You want the pictures to look good. It’s the first impression that your tenants have when they walk up to this property, so you want to kind of set the tone for when they walk into the house. Then, you blow their mind with your sweet renovations that I just shared with you.

So, that’s what I recommend. I hope you learned something.

If you like the video above, smash the like button. And don’t forget to subscribe to the BiggerPockets YouTube channel, so you can see more great videos.

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Which renovations do you believe have a high ROI? 

Weigh in with a comment below.

Mat Piche is a real estate investor, certified carpenter, and Realtor, specializing in single-family investment properties in Canada. He currently owns 27 rental properties and is also flipping homes on a regular basis on top of that. At 30 years old, Mat became a self-made multi-millionaire from real estate investing. He has his own YouTube channel, where he shows his followers how they too can achieve financial freedom through real estate.

    Jason Johnson Flipper/Rehabber from Lehi, UT
    Replied about 2 months ago
    All great points! Notes taken!
    Margie Kohlhaas Rental Property Investor from Algona, IA
    Replied about 2 months ago
    These are all great ideas. I will bookmark this as I'm just starting my first flip next month. Thank you!
    Nathan Richmond Rental Property Investor from Visalia, CA
    Replied about 2 months ago
    Agree 100%. I'm on my 2nd flip and these are places where my money goes. I also tend to put in nice windows with big fins. Those really pop on a house.
    Wenda Kennedy JD from Nikiski, Alaska
    Replied about 2 months ago
    I too agree. I have rentals. I like hard floors throughout. Carpet show "wear" quickly and hard floors can be mopped. They hold up a lot longer. I put "mud rug" in our arctic entries to catch the dirt and water on the way into our unit. We are in Alaska, so having something durable and waterproof is very important. We also change the windows, which helps on our utility bills. We think about the "long-haul" on everything. If we fix it right the first time, we don't have to go back during the middle of the winter to do it again. We strive for happy tenants. The whole idea is to make our lives easier as the owners.
    Kris Krisdianti
    Replied about 2 months ago
    Couldn't agree more about the kitchen, i've been there.. ________________________ http://hairstyle.my.id/
    Katie Rogers from Santa Barbara, California
    Replied about 2 months ago
    When I was a tenant, I hated accent walls because they often clash with my stuff. However, I was not willing to spend my money to paint it over. If the wall was too dark or too wild a color, I would simply pass on that rental, and the landlord would lose a chance to get a great tenant.
    Charles Rehberg Investor from Athens, Georgia
    Replied about 2 months ago
    Exactly what is the vinyl flooring product you refer to?
    Frances Tsang Flipper/Rehabber from Houston, TX
    Replied about 2 months ago
    Is this what you call luxury vinyl plank flooring? Agreed laminate floor looks cheap but would you also use vinyl plank in a flip vs. hardwood or engineered hardwood?
    David Lawrence from West Chicago, IL
    Replied about 2 months ago
    I am also interested in finding out the brand of the flooring that you are using. Thank you
    Account Closed
    Replied about 2 months ago
    I would also like to know what flooring you're using. I can't find "crushed vinyl resin" flooring.
    Joseph M. Rental Property Investor from Sacramento Area, CA
    Replied about 2 months ago
    The one thing I would add and do for all of my properties is make sure the front door pops! New hardware, fresh paint, clean and welcoming. Also, nice large, new street numbers.
    Seth Wilcock Lender from Denver, CO
    Replied about 2 months ago
    Great stuff! Thank you for sharing these tips!
    Luis A Caez Diaz from FL
    Replied about 2 months ago
    This is great!
    Brendan Fleming Real Estate Agent from Greenville, North Carolina
    Replied about 2 months ago
    I'm a visual learning and I think this is one of the best videos/articles I've clicked on. I plan on saving this email and using it as a reference over and over. Thank you!
    Julie O. Real Estate Investor from Westminster, Colorado
    Replied about 2 months ago
    I agree with and do all of what you suggest-- except the floating vanity. I too will spend a little more for high quality, durable finishes. If the tenant can't sit on it/swing from its doors/drag furniture across it/let their kids play on it, it's not tough enough. I would hate to have a floating vanity end up on the floor! That said, I would also like to know what kind of flooring you're using. I've been doing a lot of luxury vinyl plank lately, but always interested in something new/better.
    Peter Messmer
    Replied about 2 months ago
    I have to disagree on the "white kitchen" argument. As a constant reader on 'the latest and greatest' in home renovations...white kitchens were "extremely cutting edge about 3 years ago. Today...unusual colors like "cobalt blue," or "army green" or even "black" are hot hot hot colors for kitchen cabinets today. Plus..its pitiful how everyone is painting all the rooms in a boring gray with white trim. How uncreative can you get. Just saying...
    Tim Greenfield Rental Property Investor from Wiesbaden, Hesse
    Replied about 2 months ago
    Great Article
    Kristen Haynes Specialist from Charlotte NC and Charleston, SC
    Replied about 2 months ago
    I am also a Realtor/ Broker (owner of my firm) and Investor in Charlotte, NC, as well as an Unlimited Building GC. I beleive that the flooring product that Mat is referring to is LVP- Luxury Vinyl Plank. That is NOT the same as a laminate (floating) floor, which is a newer version of the old "Pergo" floors. That is a wood-engineered product, and warps if you get it wet, just like hardwood, so make SURE you are using LVP, and not laminate, especially in kitchens and in bathrooms. It is extremely durable, and people LOVE it- it looks just like hardwood floors, but it is easy to maintain, like a vinyl floor, and it is VERY difficult to scratch or gouge the floor. I like the 5 to 7 inch, 'wider plank' look- that's what is in style today. I also see the 'gray' phase as going OUT in my area- it only works if you have furniture already built around that color scheme- and subway tiles, also, are on their way out in my area. I use Sherwin William's "Softer Tan"in all of my rentals and flips- it's a nice, beigy neutral that EVERYONE loves- I have never, ever heard a single complaint from a potential renter, or in feedback on a flip, using it -Google it and see it on the Sherwin Williams web page or copy and paste this link: https://www.google.com/searchq=sherwin+williams+softer+tan&rlz=1C1SQJL_enUS775US775&oq=sherwin+williams+softer+tan&aqs=chrome..69i57j0l5.5631j0j9&sourceid=chrome&ie=UTF-8 - If you want it just a 'little' lighter, add in a few drops of white to the mix. As far as an accent wall,if I even do it, I pick the rear wall of the great room with the window detail, or the vaulted wall, above he fireplace, and I don't use a non-neutral color- I go ONE SHADE darker on the color wheel of the SAME color (you'll see the coordinating colors on a strip of Softer Tan at Lowe's or at the Sherwin Williams store). Other good colors are Accessible Beige and for small rooms, Navajo White (it's a little yellow for me, but many builders use it in small spaces like smaller bathrooms). Accessible Grey is a good grey toned color if you DO want to do a gray-themed house. Here, subway tiles are also on the way out, I use a kind of chunky, tumbled brick tile with various sizes, or as a neat back splash, those skinny, mirrored looking tiles in varying shades of brown: https://www.google.com/search?rlz=1C1SQJL_enUS775US775&tbm=isch&sxsrf=ACYBGNRredyCE9Mij2A4qLqrv2XvSod5pg%3A1569849790226&sa=1&ei=vgGSXdq5DcmItQXr47XYDA&q=tumbled+brick+subway+tile+brown+tan+various+sizes&oq=tumbled+brick+subway+tile+brown+tan+various+sizes&gs_l=img.3...32972.35312..35530...0.0..0.126.855.8j2......0....1..gws-wiz-img.0Zn2PTQcowc&ved=0ahUKEwjakOOY0vjkAhVJRK0KHetxDcsQ4dUDCAc&uact=5. Every area has its favorite colors, so go out to current builder's model homes to see what is popular in your area. I agree definitely with updating the Baths (absolutely do dual vanities if you have the room), and take out the outdated brass fixtures and faucets, towel bars, etc. and go with satin nickle (not mirrored-looking chrome, or Venetian brown- that's too dark for many people and these brown fixtures are also trending out). I agree with the order, also- Kitchen, Bath, and Flooring. Absolutely, take out any carpeting and save yourself a lot of grief, these LVP floors are pet and kid friendly, virtually indestructible, here's the look: https://www.lowes.com/pd/ProCore-16-Piece-5-75-in-x-35-75-in-Heirloom-Oak-Luxury-Locking-Vinyl-Plank-Flooring/1000389559 (but I would go with a brown, not gray, neutral- in fact, I used this very same floor in my last-updated rental). YOu can use this same flooring in the baths, or go with an LVP bath flooring that looks like stone or tile:https://www.armstrongflooring.com/residential/en-us/flooring-installation-advice/articles-videos/vinyl-flooring-that-looks-like-stone.html . Thanks for the VERY well written article, Mat!
    Andrew Garcia from Fort Bragg, NC
    Replied about 2 months ago
    Great info and tips!! I will definitely reference this one when I am faced with renovations one day! Thanks for all the great knowledge.
    Kyle Nelson from Polson, Montana
    Replied about 1 month ago
    I put vinyl plank in $1mm+ homes often as a flooring installer. Don’t hire a contractor to lay your floors by the hour, get a real flooring pro that will charge by the sq ft. Try to save and you’ll spend more in the end, I see it often.