How do develop a sense of what increases value.

Question

Hey friends,

When rehabbing, you obviously want to maximize the value of the property. How does one develop a sense of what adds value to a property? are there any hard and fast rules? or do you develop a general sense with experience?

J Scott · Answer

Ned beat me to it.  Go look at your competition -- see which houses are selling for more and which are selling for less, and note the differences between what each offers.  You'll start to see trends that are specific to your area, target buyer demographic, etc.

Ned Carey · Answer

Go out and look at 50 rehabs done by other investors. you will see the good, bad and the ugly. Learn you market and what buyers (or tenants) expectations are. You do that by  visiting lots of properties.

In general kitchens and bathrooms make the most pop for the dollar. Overdeveloping for your neighborhood may help sell faster but may not  get much higher of a price.

Russell Brazil · Answer

I second what @Ned Carey says in that seeing lots of rehabbed homes will give you a good sense. Understand how what will bring value in one neighborhood might not in another. Study the flips and see what changes in each flips seems to bring a premium.  Are homes that use marble countertops consistently selling for more or less than ones with granite.

If you have access to an agent who either flips themselves, or works with flippers, ask them for their opinions, as they may have that sense.  Here in DC I see neighborhood differences in color of cabinets, types of countertops, need for a master bathroom, etc. One neighborhood the market might demand a master bathroom, while another neighborhood it is not needed. This usually corresponds to the price points of the neighborhoods, though not always.

How do develop a sense of what increases value.

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