When renovating a flip, not every upgrade deserves the same budget.

Question

Some improvements help the property stand out, while others may not add much value.

What's one renovation you think is almost always worth spending money on?

Matthew Morrow · Answer

@Vladimirs Veiss me again. It depends on the deal. Around here the inspection period is negotiated in the agreement of sale, and on an older property I'd rather ask for enough time up front to get a contractor through, not just the inspector. A walkthrough gets you close, but the stuff behind the walls is where the surprises live. If I can't get real eyes on the big items, I'd rather carry more reserves than guess. PA doesn't really have the attorney review period NJ does, so the inspection contingency ends up doing most of that work.

Matthew Morrow · Answer

@Siahna Im I'm with Vladimirs on anything that keeps water out. On older houses the money that mattered most for us was the stuff nobody sees, plumbing, electrical, roof. My first house we basically redid all of it just to live there. Buyers won't pay extra for new wiring, but they'll walk when the inspector finds old wiring. After that I'd probably put it into the kitchen and baths and keep everything else simple. Every property is different, but that's roughly how I'd do it.

Vladimirs Veiss · Answer

Hi Siahna, good question to start the weekend with!

For us it's anything that keeps water out: roof, gutters, grading, plumbing. Buyers rarely notice it, but it protects every other dollar you put into the house, and it's often the first thing an inspector flags.

For what buyers do notice, it's the kitchen, priced line by line rather than as one "kitchen budget", because that's where scope quietly grows. What do you see your borrowers overspend on most?

Siahna Im · Answer

That’s a great point! Water-related issues can quickly turn into expensive problems if they’re overlooked, and a detailed kitchen budget can help keep costs from creeping up. It really comes down to balancing essential repairs with upgrades that support the property’s value. Do you build a contingency into your rehab budget for unexpected issues?

Vladimirs Veiss · Answer

@Siahna Im thank you! Rather than guessing a buffer, we price everything from the house plans and photos. Once we have the plan, we already know where pipes, wiring and weak spots are likely to be.

Surprises still happen. On our jobs in Switzerland we covered two of them at our own cost:

• A pipe burst during the work and flooded the first-floor ceiling of a private house, so we repainted the whole floor.
• The pipes were old and the owner didn't want to replace them. Our worker didn't remove a fitting correctly, it broke, and we replaced all of it.

A pipe burst during the work and flooded the first-floor ceiling of a private house, so we repainted the whole floor.

The pipes were old and the owner didn't want to replace them. Our worker didn't remove a fitting correctly, it broke, and we replaced all of it.

We collect every case like this into our model, so it knows in advance what can happen. For example, when you open the ceiling of a wooden house built before 1990, the likely extra work is already in the budget. Or we split the job into blocks and price the next block only after the ceiling is open.

Every house is a new case, and it's important to warn early, both the owner and the lender or insurer. After floods it works a bit differently, and we've learned to assess the condition of the house for that too.

Have a great day!

Ametria Chaney · Answer

For me, it is the kitchen and primary bathroom — but with a caveat: spend for clean, durable, and broadly appealing, not for luxury. Those are the rooms buyers and renters notice first, and a tired kitchen or bathroom can make an otherwise solid home feel dated. I would prioritize good lighting, sound flooring, updated fixtures, and a layout that works, before spending on high-end finishes that only a narrow group of buyers will value. I also put safety and function first: if something is broken, leaking, or outdated behind the walls, that has to come before cosmetic upgrades. In short, spend where people live every day, keep the finish level in line with the home and its price point, and save the splurge for the one feature that truly helps the home show well.

James Jones · Answer

Bedrooms and bathrooms. Specifically, the conversions that add a bedroom and a bath where the space already exists. We do 2/1 to 3/1 and 3/1 to 4/2 or 3/2 conversions all over Memphis — converting a carport or garage into a master bed and bath typically adds about 400 to 650 square feet. That spend moves two numbers at once: the rent and the ARV. A 3BR that rents at $1,395 becomes a 4BR that rents toward $1,950, and the appraisal follows the bed and bath count. Kitchens and finishes matter, but they're cosmetic — the market pays for beds, baths, and square footage. If a dollar doesn't add one of those three, I think hard before spending it.

Juan Hasbun · Answer

For me, it's kitchens, but with an important caveat: I don't mean installing the most expensive cabinets or high-end appliances.

A dated kitchen is one of the first things buyers notice when they walk through a house. A clean, bright, functional kitchen can make the entire property feel updated, even if the rest of the renovation is fairly standard.

The best returns I've seen usually come from:

• Painted or refaced cabinets when possible
• New hardware
• Durable countertops
• Updated lighting
• Modern backsplash
• Stainless appliances (when appropriate for the neighborhood)

Painted or refaced cabinets when possible

New hardware

Durable countertops

Updated lighting

Modern backsplash

Stainless appliances (when appropriate for the neighborhood)

You don't necessarily need a luxury kitchen. You need a kitchen that feels fresh and move-in ready.

Honorable mention goes to flooring. Consistent flooring throughout a home can completely change a buyer's perception of the property. It's one of those upgrades that photographs well, shows well, and impacts every room.

On the flip side, I've seen investors overspend on things buyers barely notice. The goal isn't always to build the nicest house on the block. It's to spend money where buyers emotionally connect with the home.

If I had to pick just one area to allocate a little extra budget, it'd be the kitchen every time. That's where I've seen the most impact on buyer interest and overall marketability.

Vladimirs Veiss · Answer

@Matthew Morrow thank you, Matthew, the PA perspective is really helpful! "The stuff behind the walls is where the surprises live" is the truest line in this thread, and it's exactly why a contractor on the walkthrough beats an inspector alone. My rule on old houses is simple: the house usually tells on itself if you know where to look. A panel with breakers from three different decades, three kinds of pipe under one sink, fresh paint on just one spot of a ceiling. Each of those says a previous owner patched something, and patched work is where the budget leaks. On our jobs every one of those signs becomes its own priced line item before work starts, so the reserve is sized by evidence, not a flat percent. Which of those signs has burned you the most on a 100-year-old house in PA? Have a great weekend!

Vladimirs Veiss · Answer

@Matthew Morrow thank you so much for sharing this, your experience really means a lot to us. Your lesson is the key one: the price you pay is the most important number, and on that first house you couldn't know upfront how much was waiting behind the walls. I hope that soon new owners won't have to learn it the hard way, and will be able to plan before they buy: whether to take this house at all, and what will happen once they do. Looking back, if you'd known the real renovation cost before that first purchase, would you still have bought it? And what number would have made you walk away? Have a great day!

When renovating a flip, not every upgrade deserves the same budget.

When renovating a flip, not every upgrade deserves the same budget.

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