Does a new roof over-improve this house?

15 Replies

Bought my first house a few weeks ago planning to buy & hold it. The original budget was 14k. It would've been a marginal flip (I projected I would've made only $9k if I flipped it today), but the rental rates are strong in that area and I projected a 31.5% COC% on a rental.

Unfortunately, things went off the rails before the renovation has even started. My estimates for the new roof ended up being way off. I had budgeted 4k for the roof (estimated by my contractor friend who owns 30 houses of his own and has re-done several roofs), but bids are coming in, in the 7500-9500 range which is remarkable for an 1100 SF house (2 weeks later, I'm still getting new bids).  The problem is the roof over the carport and back addition were both flat, so they were prone to major ponding.  I wanted to rebuild them on a pitch using a TPO tapering system so the water would trickle off the roof.  Even my contractor friend was stunned at how pricey this is turning out to be.

The problem I have now is that I feel this tapering system is probably a negative investment from an investors standpoint. I feel buyers/renters won't care that I put all this extra money in just to make the roof pitched. They'll care that it's new, but they won't pay any extra just because I paid to have it pitched (given that most roofs are already built with a pitch). To a buyer/renter, a new roof is a new roof whether it costs 4k or it costs twice that. There's nothing in the sales comps that suggests the ARV of the value would go up a tapered roof.

The larger issue looming would then be the rest of the scope of work. To save some money for the roof overages, the biggest ticket items I have that could be cut to save money are things that buyers/renters really would care about. I could save $3000 just by not re-painting the entire house inside and out (the house was painted 3 years ago and is "okay"; I would just only paint the bad areas) and leaving the crappy kitchen countertop and kitchen cabinets. Of course, these are things that renters/buyers actually care about more than a roof and thus if I cut them, then this new $8k roof could end up lowering my ARV/rental rate as opposed to raising it! If I keep all of them, it might at best keep the rates the same as I had projected but now I'm sinking an extra $5k of my money into an abyss. That's over a full year of net rents to get that back for something that might add nothing to ARV!

Do you think that this TPO system for the roof is in fact an over-improvement or am I wrong?  If I do go ahead and do it, do I just suck it up, leave everything in the SOW, and just take the loss on the roof project?

Edit: Just to clarify something.  If I rebuild the roof without the tapering (leaving the carport roof flat and thus still prone to the long-term effects of ponding), it would save something like $600-1k off bids.  It's unlikely ponding would become a major concern on a new flat roof for 10 more years but would obviously depreciate faster (the tapering system has a 20-25 year shelf life).

Bite the bullet and do the tapering roof as you'll recoup it when you sell down the road as long as homes in that area appreciate. Also, you'll be protecting your investment by doing it right. If you were flipping it, I'd probably swing the other way and leave it flat.

I know it is a tough pill to swallow, but I would pay the extra cost and get the roof tapered.  You just don't know what could happen with that water once the roof is repaired.  Just because it does not leak into the walls of the house now, doesn't mean it won't with the new roof.  The last thing you want is for water to leak down the interior walls of the house.  This can cause damage to the walls, electrical, or the nasty M word, Mold!  

Originally posted by @Rodney Marcantel :

Bite the bullet and do the tapering roof as you'll recoup it when you sell down the road as long as homes in that area appreciate. Also, you'll be protecting your investment by doing it right. If you were flipping it, I'd probably swing the other way and leave it flat.

This is also what I would recommend. If you're going to keep it, sink the cash. If you're going to flip it, it's over-improvement. 

if I read your posting right, the additional investment to do it right would be between 600-1000 dollars extra. If that's the case it seems like an easy decision. I agree with the other comments in that you're better spending the money now and knowing exactly what you're getting rather than setting yourself up for what could be more costly and time-consuming endeavor later on down the road. My question.....is the roof on the carport connected to the house? Also, When you say there's ponding water do you mean that there's standing water on the entire roof or there are small sections of the roof that pond after a rain. The definition of ponding water is standing water after 48 hours. If you simply have several low spots on the roof that have ponding water after it rains in those areas, it can actually be fixed by building up the roof surface in those areas so that there are no low spots. If the roof is actually Built over a completely flat deck then you would need to taper the system to direct the flow of water. Seldom are residential roofs built with a flat deck. I guess depending on the size of the roof and whether it is connected to the house and what the exact price difference would be if $600 will get you into a tapered roof system I say definitely do it

Originally posted by @Jake Landry :

if I read your posting right, the additional investment to do it right would be between 600-1000 dollars extra. If that's the case it seems like an easy decision. I agree with the other comments in that you're better spending the money now and knowing exactly what you're getting rather than setting yourself up for what could be more costly and time-consuming endeavor later on down the road. My question.....is the roof on the carport connected to the house? Also, When you say there's ponding water do you mean that there's standing water on the entire roof or there are small sections of the roof that pond after a rain. The definition of ponding water is standing water after 48 hours. If you simply have several low spots on the roof that have ponding water after it rains in those areas, it can actually be fixed by building up the roof surface in those areas so that there are no low spots. If the roof is actually Built over a completely flat deck then you would need to taper the system to direct the flow of water. Seldom are residential roofs built with a flat deck. I guess depending on the size of the roof and whether it is connected to the house and what the exact price difference would be if $600 will get you into a tapered roof system I say definitely do it

 Carport is attached to the house.  It's not just one area that ponds.  First time I went up there was 2 days after rain and it was pretty much a swimming pool right in the middle.   

I maybe got some good news today.  I had another roofer out there and he floated the idea of a WDG Silicone Coating on the entire roof.  It's usually used for commercial buildings, holds up extremely well in warm weather, and doesn't require a full reinforcement of the roof fabric.  It wouldn't solve the ponding issue, but it comes with a 20 year warranty (5 years for labor) so if I decide to sell the house in 3-5 years then I can still market the roof as semi-new with warranty.  Most importantly, the bid was $6k (by comparison, he said he could do TPO for $7900).  He's double checking with his boss to make sure my house qualifies for the WDG, but if it does then I think I have to go with it (granted it's still over budget but substantially less over budget than the other bids).

Have you ever used WDG before?

Updated over 3 years ago

On further research, it might not be more than a short term solution that is heavily marked up by the roofer. That said, he might be onto something. My contractor friend is going to see if he can get some of his guys to seal my roof for cheaper. That m

I got cut off.  What I was saying was if my contractor friend can get some of his guys to give my roof a short-term seal for $1k-2k, that would free up a lot of money to fix all the cosmetic items now within my budget and get higher rental rates since the house will look much newer.  The seal might only last 1-5 years, but that buys me time to cash flow the house for a little while before having to bite the bullet on the new roof.  We're looking into this option.

Congrats you're in the game? Fix it up correctly, rent it, collect all that you put in, then decide to keep or sell.

I believe in holding fir the long term.

Originally posted by @Timothy Riley :

Congrats you're in the game? Fix it up correctly, rent it, collect all that you put in, then decide to keep or sell.

I believe in holding fir the long term.

 Thanks Tim.  What is your opinion on my roof situation?  If I can get away with sealing it for 1-3 years for $1000, do I go ahead and delay the new roof (which will cost at least $7k if I go with a licensed roofer, $5.5-6k with an unlicensed)?  Or do you think I should just do it now?  

If I delay it by sealing, that means I can focus more money now on some of the cosmetic items I was going to skimp on (new kitchen countertop, cabinets, full re-paint as opposed to partial).  Hopefully by the time the sealing runs out, the cash flows from the rents will have paid for the new roof.  That said of course, it's likely a band-aid solution and eventually I'll have to get to the roof anyway.

(All of thus depends on whether or not I can get the roof insured by sealing it anyway)

Short cuts often end up cutting me shortly (soon after). Get it done correctly by professionals that can supply receipts along with warranties giving you a paper trail to add to your comforts of one less worry.

If you are going to buy and hold this as a rental time will reimburse the money spent.

Tim

@Scott Le My previous business was a roofing company. I would go with the tapered insulation if the water on roof is ponding. Any coating you get is not going to help it is going to mask the problem. If you have pictures I could further advise. It hard to tell without looking at it.

Originally posted by @Dave DeLima:

@Scott Le My previous business was a roofing company. I would go with the tapered insulation if the water on roof is ponding. Any coating you get is not going to help it is going to mask the problem. If you have pictures I could further advise. It hard to tell without looking at it.

 Hi Dave.  You can't see the main roof (or much of it at least) but here is a good pic of the carport flat roof. There's about 600 SF of flat roof and about 1400 of the main roof.

With the bids I've been getting for tapered, I am starting to seriously consider just rebuilding it flat. Another option is that I also have a friend of a friend (who comes highly recommended) who might be able to do the tapered for $2500 less than everyone else but is not licensed and can't pull permits.

The prices are not that bad, for what you would be getting. The material alone would be between $4000 and $4600. Roofing material is not cheap. Shingles have 

@Scott Le  The prices are not that bad, for what you would be getting. The material alone would be between $4000 and $4600. Shingles alone have gone up 100% in the last 10 years. Wages have not.

@Scott Le Not fixing the pitch is a temp fix, if you hold the house, then you will redo them in a couple of years, or probably it will turn-off buyers or will give you a bad rep because you sold them something that's broken (ponding). On first hand, don't believe in warranties, just to be safe, when you file a claim, they will give you the run-around anyway. The bids for pitching is normal, go with a professional, it pains but at least it heals and doesn't come back, look on the bright side, at least you don't have to pay for it twice.

Originally posted by @Dave DeLima:

@Scott Le The prices are not that bad, for what you would be getting. The material alone would be between $4000 and $4600. Shingles alone have gone up 100% in the last 10 years. Wages have not.

My REI mentor owns 33 houses in this area, all roughly the same size as mine (1150 SF) and co-owns a subcontracting firm. Of his 33 houses, he's never paid more than $5000 on a new roof. The issue with my house is wanting to build the pitch and that the slope of the main roof requires modified shingles and not the cheaper tile kind. That's why the bids are coming in so high. These are not "standard" prices for this area (fortunately, for future projects). If I just had a normally pitched roof with tile shingles over 1150 SF house, then the bid would probably have been where I initially expected in the 4-5k range.

I have an unlicensed bid for $5500 (already talked him down from 6k). The lowest licensed bid I have for the pitch is $7800. I said from the onset that if it was within $1000, I would've paid up for the licensed roofer. For that much money, I think I have to just pay the 5500. It's just such a lifesaver for my budget and he has done good work for my REI mentor before.

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