I’ve been flipping homes for almost 10 years now; it’s my passion to take an old property and breathe new life into it. Yet as everyone knows, making mistakes is part of the learning process—and during the course of flipping hundreds of homes, I’ve definitely had some hiccups along the way.
Most homeowners believe that upgrading and adding features and rooms will always boost the value of their property. I can’t tell you how many times I’ve met with homeowners who are thinking about selling their property and want to list for hundreds of thousands of dollars more because of the additions they’ve made to their house. But in reality, the upgrades may be too personal, or not necessary, or result in the house being choppy—which just reduces the value of the home because the new owner will typically have to go through and remove what the previous owner added.
You may have a long list of items you’d like in your home, but it’s important to think of the long-term payoff when investing in upgrades.
Your home is your castle, make it what you want it to be, but keep in the back of your mind whether your investment will be a good one in the long run. I’ve done flips where I’ve added upgrades that just absolutely have added no value and, in some instances, have dragged down the price. Here are some of the mistakes I’ve made over the years, which hopefully you will avoid when renovating your home.
1. You say bidet, I say no thanks
One of the most interesting projects I worked on was a 1991 flip in an established area of Anaheim Hills. This is a very interesting area, as most properties there have large lots that are usually an acre and up, and home sizes of 6,000-plus square feet.
The 8,000-square-foot home that I was working on had every amenity one would need: a great pool, home theater, game room, 10,000-bottle wine cellar, and seven-car garage. So, in the spirit of “having it all,” I thought why not add a bidet in each of the bathrooms?
I soon realized that this decision was a poor one, as word quickly spread about the “bidet house.”
My idea had backfired. Not only did it detract from the thousands of dollars I had put into the property, it also took away the hours of planning and structural changes we had made just to allow room for the addition.
The point: Pull back on the reins of creativity just a tad, save yourself the headache, and the money, and do what people are accustomed to seeing. Let the new buyer put in the unique items. Make your additions neutral and of good quality, and let them speak for themselves.
2. Swimming pools: Not always a splash
We are lucky to enjoy so many days of nearly perfect weather in California. It’s no surprise that when it rains, the people of greater Los Angeles County go into a state of shock.
Pools are a great source of fun and entertainment for kids and adults alike. There are great pool designs that are modern and elegant and still kid-friendly. Infinity pools are perfect for homes that sit on lots with unobstructed views.
But a lot of families with kids actually avoid homes with pools for safety issues. A gate around the pool can just create an eyesore, and most people don’t care for it.
For one of the homes I was flipping in Buena Park, I decided to put in a pool, which added about 15 days to the flip time and about $50,000 in expenses. Not good! I can’t tell you the number of families that came through and walked right out for that reason.
After 35 days on the market and hearing the same feedback over and over, I decided to spend an additional $15,000 and fill in the pool. It sold within two days.
3. It’s a jungle out there
A homeowner recently contacted me, interested in selling her home directly to me to flip. I arrived at the address, but couldn’t tell if I was at the right house: There were so many overgrown trees and bushes that finding the door was near impossible. The owner told me she’d wanted to create a wall between her house and the street.
Landscaping is great for adding privacy and curb appeal. Flowers and a picket fence create charm and make the home feel cozy before one even walks in. But there is good reason why people prune.
When it comes to your home’s exterior, think simple, using a combination of plants and flowers local to the region. Perennials are always a nice way to go, and water-conserving plants are popular now. There are other ways of creating space between your home and the street.
4. Wall-to-wall carpets? Not so groovy
In the 1970s, plush wall-to-wall carpet was the rage. It made the house feel warm and cozy. And isn’t it nice to step out of the shower onto a nice, thick carpet? Fast-forward to 2018, where most of us think of the billions of bacteria breeding beneath our feet, not to mention needing to get the carpet replaced every couple of years.
Use flooring that is durable, attractive, and easy to maintain and clean. There’s no need to avoid carpet altogether—having it in the bedrooms is still a great way to make it into a more intimate space. But in most of my flips, I now use area rugs along with hardwood or laminate flooring throughout the house.
5. Luxury upgrades that make it ‘that house’ on the block
We all love being the best-looking person and standing out in a social setting. When it’s your home, however, try to fit in with the aesthetics of the neighborhood—don’t be the odd one out.
I recently worked on a house in Newport Beach. It was a nice, gated community with tract homes from the 1980s. I knew I had to make it perfect if I was to get a $2 million price tag. Once I got going, I never stopped, and ended up redoing the entire interior and exterior. I spent a fortune on high-end finishes, some of which may not have been necessary.
At the end of the day, I listed the home much higher than comparable recent sales and I actually ended selling at list price! The caveat? It didn’t appraise for that much. I learned that I could have spent less and sold for less, with likely the same results.
Do not overbuild for your neighborhood. It may give you bragging rights, but it’ll also make you the butt of every joke, and it will definitely not pay off in the long run.
6. Improvements that only you know about
It’s hard to fathom spending a lot of money on home improvements and upgrades that will have no impact on your home’s value when you actually end up selling. But the most wasteful are improvements that only you know about.
Sure, a new AC may make your home a better place to live—but even if a new AC may be necessary, you shouldn’t expect to recover the costs down the line. Buyers expect that the water heater or the garage door opener will be in good working condition, but they will not pay more just because it’s a new unit.
Take it from someone who makes his living from flipping homes: Keep it simple, keep it neutral, keep it easy.
Source: Read Full Article