The roof. As part of the outside walls this is first to keep everything in the good shape it is in. Then I would make sure the house is-
1. water tight - fix the roof
2. all working parts are still working ( water heater, furnance, ect) and no exposed outlets or wires
3. broken windows
4. tight doors
5. no flaking paint exterior or interior
6. flooring - safe to walk on
7. fix or remove rickety outbuildings
8. pleasing to the eye from the outside ( well trimmed shrub & trees)
This is what I learned on my first buy and it just cost me 3 returns of the appraiser to get it right.
Thank you so much @Karen Sanders!
So if all the things you've mentioned are taken care of, where would you spend your money? What things give the most bang for your buck? Paint, flooring, cabinets, bathrooms, lighting, windows, landscaping?
I am not sure what state you are in or whether you are doing an B+ or D property but I would look at everything and decide if anything sticks out as a real sore thumb. Curb appeal is very important as if things don't look good they will have a negative attitude before they walk in the door. After that I would look at which and how many things you can do with the remaining budget. Lights may just be a couple to give better lighting in the kitchen or in the bathroom for better light when a lady puts on make up each day. A new rug and paint in the living room in a more modern pallet may make the biggest bang for your buck. Fresh and new is the name of the game for the remaining $$, making as many changes that you can do for the balance.
Paint it, switch out all the lights for daylight LED, clean it like a laboratory inside, mostly denude the landscaping outside no matter how lush and beautiful you think it is. I'm going to say some things that might tick off any appraisers here -- when a bank orders an appraisal, the job nowadays is pretty much lowballing the properties as much as they can get away with. The appraisers need pics to back up their lowball appraisals. So make bad pictures as hard for an appraiser to take as you can.
When you meet the appraiser, be wearing the most expensive duds you own and be driving the most expensive car you can rent. You are a big shot, and at the same time go out of your way to be nice to the appraiser. Offer them some fresh-squeezed juice or some Costco-bought single-origin coffee out of the newest, shiniest Keurig you can put in the kitchen.
One trick that I absolutely love and have talked about before on Bigger Pockets is hanging a $200 jetted stainless shower tower in the bathroom. There are quite a few benefits to having these things in rental properties, but their ability to instantly ritz up a cheap alcove tub/shower in a small and boring bathroom is incredible.
A related trick that I've heard works wonders in appraisals is to rent the nicest stainless appliances you can for the kitchen and laundry. After the appraisal process is over, back they go to the store and in comes the recycled junk from the scratch-and-dent. It's a lot harder to make an argument that a house is worth peanuts when late-model shiny new stainless appliances figure prominently in the kitchen and laundry shots.
The kind of people who end up appraising tend to share many similarities with mediocre real estate agents and failed flippers, and may be one or both. They are typically very light on actual residential construction knowledge, although they do their best to talk a good game. They like their color palettes and vignettes arranged on the fireplace mantle. They love bright, clean, modish spaces. They love pretty pictures. And more than anything else they respond to being treated like important people by those that they believe have money, class, and power.
Cheap budget upgrades for your 10K budget, I would definitely:
- Paint the whole house repose grey (Sherwin Williams) with white trim
- If flooring isn't the same or needs to be replaced.. a nice, lighter colored laminate throughout
- New baseboard trim, 5.25"H adds a nice touch (and paint all trim bright white)
- Kitchen.. if old cabinets, paint them. If they're fine but countertop is old.. put a new one one. Granite. Make sure SS appliances are there (or VERY clean white/black appliances.. uniform in color).
- Add some updated (but cheap) exterior lights and interior LED lights (either recessed or swap out bulbs)
- If bedrooms only have 1 dome light, could consider adding a nice big fan/light combo. I usually pick up a $100 fan/light combo (modern looking of course) from Home Depot or you find deals online
Originally posted by @Jim K. :
switch out all the lights for daylight LED
This is the only part of Jim K's post I disagree with. LEDs are good, but the "daylight" ones (5000+ K) look incredibly blue and harsh to me. I did LEDs in my rental (both bulbs and ceiling disk fixtures where there used to be can lights), but I got the 2700 or 2750 K ones - pretty close to a plain old soft-white incandescent. One of the disk lights is 3000 K, and I can tell the difference, but I don't know if the tenants care or not.
The daylight LEDs might look a little better if the whole house has them. If you want to check, maybe buy a couple of daylight and a couple of 2700 K ones at the store, and try them out at your house.
This rating (the color temperature) is not always on the front of the LED lamp box. Usually there's a little box on the side or back that says "Lighting Facts", and it will be listed in there.
In Oregon it is a no no to meet with the appraiser when you are buying a house.
Yes, you're right. I seem to have babbled through a technical point. I'm a digital photography buff with a background in Photoshop.
We agree on how harsh and ugly the light that 5000+K daylight LEDs produce is. What I was trying to say is that the PHOTOS that digital cameras produce under these lights tend to be superior to photos take under other forms of light. The light sensors of digital cameras are optimized to work best in this light temperature and the white-balancing programming that interprets the raw data and turns it into a jpeg-format shot does the least heavy lifting with this light temperature -- it's a feature of how the tech works. Daylight LED lighting therefore makes it harder for an appraiser to take ugly, poorly white-balanced photographs of your house.
Looking back at my original post, I did not make this clear at all. I would not leave daylight LEDs in place throughout for non-appraisers looking at a property to make a non-biased judgment of its value. But I believe in most cases, appraisers today already has a general lowball idea of what s/he wants to appraise the house at before they actually show up at your house and is looking to take photos to back up that lowball appraisal given any ghost of a chance. I believe it's wise to minimize that chance for them.
Bathrooms and kitchens are the biggest visuals...new vanity is only a few hundred bucks and will make it pop...shower curtain and rod on high end and it looks so much bettter. Metal shelf in there too...
Agree with cabinets and new appliances, not necessarily granite will look good to renters and appraisers.
My mom was a successful realtor and one thing she always did was make the sellers put in metal light switches (and new faucets )a Maybe 5 bucks a piece on the switch plates but one of those subliminal visuals that help people think higher end.
Backsplashes and pot racks can look great and are relatively cheap. Pre-finished hardwood a bigger item but the bag for the buck can be huge.
Crown molding and baseboards can work well and aren’t that expensive depending on what you use
a fresh coat of paint then flooring.....
Looking back at my original post, I did not make this clear at all. I would not leave daylight LEDs in place throughout for non-appraisers looking at a property to make a non-biased judgment of its value.
Now I understand. Yeah, for dressing it up for an afternoon, the 5000 K lamps probably do help.
(There's a local BBQ place that bought LED lamps the day they came out, and they are all much higher color temperature than 3000 K. It looks weird in their dining room. The food is good, though.)
I'm a digital photography buff with a background in Photoshop.
I do most of my digital photography with clothes on, but you do you. :D Also, since I have to pay for the software myself, I use Gimp. :) Yeah, I know Creative Cloud is a lot cheaper than full-boat Photoshop used to be...
i would agree in principal with Mike B. But some of it depends on your market. Roof and Painting are your biggies. You cant paint if it leaks.
* I would use Vinyl Plank flooring - not laminate
* I would also not use granite, unless your market dictates it. Precut laminate countertops at Home Depot or Menards are only a couple hundred bucks for a whole kitchen and will look fantastic.
Paint, Carpet, Granite Counters... BUT if you are going to flip it....the buyer is going to ask for the roof to repaired.
If you sell and the buyer gets an FHA loan...look out....there will require a lot more to be fixed...
Paint walls, ceilings, doors, trim. , replace flooring where necessary with laminate or vinyl plank, paint cabinets if in good condition and solid, new laminate counter tops. If kitchen and bath cabinets in rough shape or cheep I would replace. All this applies to a B class property, I would not use stone counters or SS appliances. Those I reserve for B+/A properties.
For C class lipstick means lipstick. You do not replace anything or spend money on cosmetic items, strictly functional beyond paint.
Very little you do by way of cosmetics will effect the appraisal much if only cosmetic. Appraisers hired by bank are trained to be ultra conservative to protect the banks interest.
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