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Dillon Carlson
  • Inspector
  • Kansas City
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What are all the ways you can force appreciation when rehabbing a property in KC?

Dillon Carlson
  • Inspector
  • Kansas City
Posted

Hey everyone, genuine question here from a new real estate investor. I know every market is different when it comes to renovating a property a certain way to force appreciation and wanted to know what I should be focusing on to do just that here in Kansas City. I have been very curious how investors are able to know this even when the market shifts and the focus changes. I am not sure if it is just a trial and error thing or if there is an actual method to figuring this out. Thank you all in advance.

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Dan Nelson
  • Real Estate Broker
  • Chicago and Kansas City
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Dan Nelson
  • Real Estate Broker
  • Chicago and Kansas City
Replied

Great question! A few answers work almost anywhere, and the rest depends on the property and location. Kansas City crosses state lines, with very different suburbs and a growing downtown. I'll come back to why that matters.

The biggest way to add value is adding square footage. More livable space almost always raises what a home is worth. It costs a lot, though, and you'll need permits.

Four easier ways that work on most properties:

  1. 1) Update the kitchen. Best case, gut it, take down a small wall and add an island with seating. The cheaper version is new countertops, stainless appliances and new cabinet doors.

  2. 2) Add a bathroom. If you already have 3 or 4, skip it. A half bath helps. A full bath helps most.

  3. 3) Update the bathrooms you have. Sellers tell me they redid their bathrooms, then I find out it was twelve years ago. They look nice, but dated.

  4. 4) Paint and fix the flooring. On its own, this won't raise the value much. Paired with an updated kitchen, it makes the whole house look worth more.

On design: unless it's your job, don't start picking tile. Tile, flooring and paint can make or break everything else. Look at nearby homes that sold for the price you want and copy them. Keep it simple. Don't pick a paint color because you think it is cool. Pick it because you can see it sells homes.

Back to location. In some parts of KC, you could spend $100K and not raise the value at all. I get calls from people who got a "great deal," fixed it up, and couldn't sell for anywhere near what they hoped. I have to break the bad news: A $125K house won't become a $300K house if the neighborhood or area doesn't support it. Check what the best homes around you sell for first. Pick the right spot, and let these upgrades do their job.

Good luck, and I'm curious to hear what others say!

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