What are all the ways you can force appreciation when rehabbing a property in KC?
Inspector · Kansas City · Member since 2025 · 4 posts · 0 votes
What are all the ways you can force appreciation when rehabbing a property in KC?
Most Popular Reply
Dan NelsonBusiness Member
Real Estate Broker · Chicago and Kansas City · Member since 2016 · 78 posts · 61 votesGreat 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) 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) Add a bathroom. If you already have 3 or 4, skip it. A half bath helps. A full bath helps most.
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) 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!
4 Replies
- 1wDan NelsonBusiness MemberReal Estate Broker · Chicago and Kansas City · Member since 2016 · 78 posts · 61 votes
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) 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) Add a bathroom. If you already have 3 or 4, skip it. A half bath helps. A full bath helps most.
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) 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!
- Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes1w
Happy to connect. You can force appreciation by exterior or interior updates. Always base it on comps
- 1wMilton ChamberlainPro MemberReal Estate Agent · Kansas City, MO · Member since 2019 · 235 posts · 107 votes
Hi Dillon! the best equity building 'lowest hanging fruit' strategy IMO is adding finished livable square footage, and increase the # of bedrooms/bathrooms where it makes sense, and then study the recent comps to figure out what buyers are actually paying for at different levels of finish and if #'s work, rehabbing the REI you also have to consider what is possible considering your REI goals and correlating strategies and what financing, skills and connections you bring to the REI that impact your expenses and profitability (however it is you decide to measure that...appreciation plays vs cash flow vs STR/mid term/ LTR etc etc
For some rough 'on paper' examples; maybe you find a nice older and big distressed house in Prairie Village KS for $505k and the nicely finished and modern nearby comps with similar specs are selling around $850k. This would be approached with focusing on updating the distressed old finishes, and you will probably ignore things like older wiring or an older roof and exterior. Maybe $50k goes into the kitchen, $45k into bathrooms, $20k into paint, $45k into flooring, and so on. I am just making those numbers up, but you get the idea. Then you sell (flip) and make your goal profit.
On the other end, maybe you buy a bombed out 900 sq ft, 3 bed, 1 bath ranch in the Northland for $115k with an ARV around $179k. but your goals are different from the last transaction and you want cash flow. Your rehab might only be $27k, but most of that money could go toward plumbing that froze over the winter when heat was shut off, rotten soffits, roof decking, shingles, electrical work, exterior paint, and other repairs. Then the cosmetic side would only be basic builder grade fixtures, clearance carpet, inexpensive flooring, simple kitchen and bathroom updates, and fresh paint. Then you rent it for $1550, with a great cash flow COC return, cap rate etc.
My long winded point is that adding equity is not always about updating the kitchen and baths in a premier KC subdivision for the best Flip numbers, nor is it always about fixing the plumbing and roof to get top market LTR rent . It can include that, but understanding what that particular region of the KC metro rewards combined with your goals will shape where your dollars are best spent to create equity. Sometimes new granite countertops make sense. Sometimes keeping the old laminate countertops, but fixing the leaky plumbing and putting down 75 cent carpet makes more sense.
At the end of the day; depends on where the property is, what you bought it for, what comparable homes are selling for, how much capital you have available, and what the market will actually pay you back for, etc etc
Happy to chat more reach out anytime!
- 6dAlex BekezaBusiness MemberLender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
Hey Dillon. I invest in Missouri myself (St. Louis though) and I'm also a DSCR lender, so I see this from both the rehab side and the appraisal side. It's not trial and error. There's a real method, and it starts with understanding how an appraiser values the house, because on a BRRRR the appraisal is what determines your refi.
Let the comps tell you what to build. Pull recent sales within about half a mile and look at the top sold comps. What do they have that your property doesn't? Bed and bath count, square footage, updated kitchens, a garage, a finished basement. Your rehab should close that gap, not exceed it. This is also how you adjust when the market shifts: the comps change and your scope changes with them.
Bed and bath count moves value the most. Turning a 3/1 into a 3/2, or adding a legal bedroom within the existing footprint, usually creates more value per dollar than finishes do. Appraisers make direct adjustments for these.
Basements work differently than you might expect. Kansas City has a lot of basements. Finished basement space is generally not counted as above-grade living area, so it gets valued at a lower rate than main-floor square footage. It still adds value, just less than people assume. Run the numbers before you spend heavily down there.
Condition rating matters. Appraisers assign a condition rating, and moving a house from a C4 to a C3 or C2 is a big part of what drives ARV. Your background as an inspector is a real advantage here. Roof, HVAC, electrical, plumbing and windows all factor in, and appraisers notice when the big systems are new.
Don't overimprove for the neighborhood. Quartz and luxury finishes in a neighborhood that tops out with laminate won't appraise for what you spent. Match the finish level of the best comps.
Curb appeal is cheap and effective. Paint, landscaping, new front door and lighting. It affects the appraiser's first impression and the buyer's or tenant's too.
The best way to learn your specific market is to walk through recently flipped houses that sold, and talk to a couple of local agents and appraisers about what's actually driving value in the neighborhoods you're targeting.
Investor Property Loan5306 Reviews
Join the conversationCreate a free account to reply, vote on answers and follow this thread.