Real Estate Development & New Home Construction

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Grace Marie Weger
  • Developer
  • Bend Oregon
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Upgrading new construction

Grace Marie Weger
  • Developer
  • Bend Oregon
Posted May 3 2022, 08:36

Hello all,

I bought my first investment property last year, its a 3 bd 2 1/2bth new construction that I owner occupy with 2 roommates who cover the mortgage. I am now looking at buying another property, and don't want to wait as interest rates are projected to rise even more and not start to lower until 2024. My only barrier is my debt to income ratio looks very high since acquiring my first property. I was advised by a mortgage broker friend that if my house appraises for enough to give me 70% equity in the property, then it will not count against me. 

I bought the house for 317k and need it to appraise for around 430k. The area I live in has exploded (like most the country) and I think will probably appraise for 420k as is... What upgrades are worth investing in to raise the value of this new construction home?

I have started replacing light fixtures, plumbing fixtures, I added nice cabinet pulls, I redid the guest half bath with wainscoting, replaced the master closet door with a custom barn door, installed wooden sills on windows

I am considering adding a built in closet system in the master ( right now it is cheap wire shelves with a metal dowel and thats it), I'd like to replace the vanity top in the master bath (currently its just a laminate, would like to do solid material), I would like to replace bathrooms and laundry room flooring with LVP (currently linoleum), and I've been considering adding a tile backsplash in the master. 

I can do all these renovations myself so the only cost is materials, but I don't have time to do them all. What do you think will give me the best bang for my buck?


Portland, Oregon

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Replied May 3 2022, 09:14

I wouldn't expect to get $100K+ appraisal value with minor cosmetic fixes. Especially if this is a new development where your neighbors have literally exactly the same floor plan, which makes the appraisers job much easier. I wish this were true, because I'm doing a rehab right now, and I'll be happy if I can pull out even 50% of my capital for what are much bigger fixes (roof, fireplace rehab, open floor plan, drywall). 

Appreciation over time however absolutely could and most likely will. 

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Grace Marie Weger
  • Developer
  • Bend Oregon
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Grace Marie Weger
  • Developer
  • Bend Oregon
Replied May 3 2022, 14:01

I just need 10k of upgrades, my home as already increased 100k in the past year market value.

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Replied May 3 2022, 20:05

My bad. . .. . I see where you mentioned that now. How are the showers/tubs? Are they already nice or are they rentalish inserts? Can you expand the 1/2 into a full? 

Anything you can add outside- deck, shade, landscaping? 

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Jonathan R McLaughlin
  • Rental Property Investor
  • Boston, Massachusetts (MA)
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Jonathan R McLaughlin
  • Rental Property Investor
  • Boston, Massachusetts (MA)
Replied May 3 2022, 20:14

Even 10K might be a stretch just with finishes, probably won't bump the appraisal category from "average" or "good" to "great". And with all the comps being new it just might not be there.

I'd dig a little deeper into your friends statement about the 70% equity, I don't understand it. 

Advantage selling would come from being the nicest home at the same price. As @Jonathan W. mentioned, increasing a half bath to a full is big. Finishing basements doesn't usually do much, but if you can get a "playroom" down there to look moderately nice it might give the appraiser an excuse...

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Jonathan R McLaughlin
  • Rental Property Investor
  • Boston, Massachusetts (MA)
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Jonathan R McLaughlin
  • Rental Property Investor
  • Boston, Massachusetts (MA)
Replied May 3 2022, 20:15

ooo, missed the deck idea, thats a good one

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Grace Marie Weger
  • Developer
  • Bend Oregon
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Grace Marie Weger
  • Developer
  • Bend Oregon
Replied May 3 2022, 20:40

Good ideas I hadn't considered! Thanks for the advice! Unfortunately HOA prevents major work outside the house, but I really like the idea of making the half bath a full!

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Jeff Wolfe
  • Real Estate Agent
  • Portland, OR
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Jeff Wolfe
  • Real Estate Agent
  • Portland, OR
Replied May 4 2022, 13:55

One way you can find out what will increase your appraisal is what do your comparable's have that your home doesn't. Seeing how many of your neighbors have the same floor plan and HOA rules it restricts you a bit but let's look at comparable outside of your neighborhood. Remember that comparable are sold in the last 3-6 months and are similar in bedrooms, bathrooms, and square-footage. I'd be happy to help you pull some comparable to see what features or cosmetic differences we can find.

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Grace Marie Weger
  • Developer
  • Bend Oregon
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Grace Marie Weger
  • Developer
  • Bend Oregon
Replied May 4 2022, 14:33

@Jeff Wolfe Thank you! I reviewed some comps and see that most of them have large yards or covered porches. I am going to see if my HOA will allow me to build a pergola off the front porch

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Kelly Asmus
  • Real Estate Broker
  • Portland, OR
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Kelly Asmus
  • Real Estate Broker
  • Portland, OR
Replied Jun 1 2022, 11:04

Do a search of homes with similar square footages/ similar age of property / in your specific area. What sold in the last 3 months and look at all the photos. What features stood out for those properties that helped them get to that appraisal value. I always say don't guess, use real market data to get your answers. All real estate is local and appraisers see the same thing over and over so you can figure out what they are assigning value to. That will give you the best info to make your home appraiser along with sold comps.