I need some advice on windows. This is my first flip, partnership between my friend/neighbor and my wife (realtor) and I. We disagree on whether to replace (and how) the windows or not. Comps for this house are all "new builds" 2014 - 2018, our house was built in 1965, there are no older home sales anywhere around us. Some of the group feels we should replace all the windows with new, standard size windows and some feel the windows are fine and should be left alone. Our house and land would be about $425-$450 built new, we are confident in our ARV of $375 given the age difference of our home...do we replace all the windows (the two on the 1st floor set in the brick, 6 of those total, and the one big one on 2nd floor)? Any and all thoughts are VERY appreciate.
Without a doubt, change them! I live in a moderate climate area and always look to upgrade windows. Makes a huge difference on both appearance and buyers/renters perception of the home. Your buyer will likely discount your price to compensate for doing it after purchase or ask for $ in escrow to have it done.
If I understand your numbers correct your probably only looking at about $3k to replace them all. I typically pay $125-$175/window install cost.
It depends on WHY you want to replace the windows and WHO you have do it. Window replacement business sometimes looks to me like the aluminum siding business did a few years ago. If you can do it for a "reasonable" price and/or do it yourself, it's not that hard then go for it.
Unfortunately too many people replace windows because a salesman told them it would save them HUGE money on their utility bills, it won't. Well it might if you live in a HEAVY WINTER climate, Rocky Mountains or anywhere that you get a really long COLD season. Every place I've seen or stayed in up in the mountains near us already has double, or often TRIPLE glazed windows. You wouldn't want single glazed if you were living in Vail Colorado because all of your heat would disappear out the windows.
In Texas you have the opposite problem, one of heat gain. Ninety Percent or more of heat gain is through the roof in Texas, even in north Texas. I lived in Houston for 25 years and did a lot of rehabs/flips when there. I had buyers ask me, and met people who moved from the north, who asked about putting in double pane or storm windows. IIRC the payback period for double pane windows was about 35 years or more.
Whereas the payback for ridge and soffit vents, and reflective material in the attic, could be as low as five years. That depended on whether you did the work or contracted it out.
I once replaced the windows in a foreclosure/flip I was doing but all of the siding needed to be replaced and the windows were of various, and mismatched, sizes and styles. In that case I deemed it worthwhile because I paid $22K for the house and figured I'd get about $60-$70K for it. Since I was going to spend about $20K fixing the place I figured spending about $1,200 or so on windows was OK.
I would, you are competing with new(er) houses and old ugly windows will take away from your finished product.
What are the expectations in the area for exterior rehabs?
If you're going to do work on the siding and brick face, it wouldn't make sense to leave the old windows.
When people look at the house and think about the cost of window replacement, they are going to think retail prices $500-$700 per window, not what it will cost you to replace them now.
Here are pictures of two of the comps:
I'm assuming the photo of your house is just showing us a small portion of it? Those "comps" look much more grand than the house you are flipping. With that being competition I would definitely do new windows.
my 2 cents, change them if it makes you feel better, but I doubt the average buyer would know one way or the other, as long as they look ok. I would often be disappointed in buyers perceptions of how well I built a house. all they cared about were the granite counters and stainless appliances etc. Hopefully that has changed some and more people are concerned with energy efficiency?
I would change them out. 6 windows are not that expensive in the overall scheme, especially if all the comps are newer builds with double pane, insulated windows. No one is going to want to spend $375k on a house that they are going to have to replace the windows on because they are no insulating the house.
Best of luck.
The house is 3500 sqft, in a very hot city. It is not grand, its old and blah, which makes it tough to comp because all the older homes have not sold, mostly new builds but they are all on smaller lots. You would pay about $450 for this home built new on an acre right now.
No one has actually said that the expense of replacing the windows will achieve a pay back through a higher resale value. You must know your market and know what that financial cost will do to your bottom line. If the cost can not be recouped in the sale price then you are only doing the upgrade to make the property easier to sell. Is it worth the cost. Probably not however only you can answer th equestion by knowing your market.
@Scott Robinson just my two cents. I can't answer without a closeup of the inside of the windows. In general, windows do not offer a payback but in some cases they are required because they look so bad. Only the side view will tell that.
It really sounds like this is your first flip. You are taking a huge risk with no good comps. Sure you have discounted the price $50K for having an older property but you provided no data to validate your assumption and even stated that there was no data to support your assumption. Without data, you are speculating. Speculating is not where to start your flipping business.
My experience is that buyers in your price point will pass rather than settle for less. Unless the area is super exclusive, you won't pull any buyers in for 10% discount.
Unless you already own this property, please reconsider buying it.
@Scott Robinson If the comps are new builds, (which obviously have new windows) put new windows in for sure.
If it were a rental, I'd say they were fine.. this is a flip, you're going for the "wow" factor, and wow doesn't remind me of 1960's style window.. absolutely change them! Windows make a huge impression!
Thank you all for the input.
@Bill S. This is our 1st flip and I would be lying if I said that I had not considered passing on this one, but I keep coming back to it for a few different reasons. One of which is there is $130k+ of profit on the table, granted split 3 ways but that is still a huge spread. Even if we go over budget by 25% and sell for 10-15% less than what we anticipate we still gross $65-$70k. Also, my wife is a Realtor and is supremely confident in our ability to sell the house when it is done, windows or not (but at a lower price).
I appreciate your concern and words of caution though. Contracts are not signed yet so I will review all this information with my wife and partner. Thanks.
@Scott Robinson is easy to measure reward. It's hard to measure risk without experience. What if it takes you a year or 18 months to sell? You are sitting on the sidelines while waiting for it to sell. There are opportunity costs if you do the deal. If it is so good why have others passed on it? Also if you don't have it under contract, offer another $50k less. Keep in mind that in general, RE agents are terrible negotiators because they negotiate to make the deal happen. Investors negotiate to make money.
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