Many investors purchase properties low with the plan to sell high. Appreciation in real estate markets contributes to higher values. Yet, the more an owner can do to make their property appealing, the faster the appreciation will occur. Improving the return on investment (ROI) can be done without just waiting on real estate markets to create value.
What Is Value?
Return on investment is derived from creating real value. When buying a property, with the idea of quickly selling it (commonly called flipping), the investor needs to think about creating value. The following is the first of two posts on ideas that provide a return on investment in excess of the cost and normal real estate market appreciation. Of course, this is very subjective and not every property or buyer will have the same results. But, this checklist of ideas most likely contains some value-enhancing suggestions that will assist the investor in finding a buyer faster. Or hopefully improving the price a buyer will pay.
Most of these are inexpensive suggestions that can easily be accomplished. They are things to be considered after the obvious structural and mechanical issues are addressed.
Curb appeal is still one of the most important issues with any house. Many buyers will not even look at a home if they do not find the outside appealing. What can be done to make the outside more attractive and create value?
- Power-wash all the surfaces. Siding, decks, drives, sidewalks.
- Paint-around the trim or even the whole house. Stick to neutral colors.
- Replace exterior light fixtures. Most of these fixtures are inexpensive and the weather does a number on them after a few years.
- Trim or replace overgrown bushes and shrubs-most importantly in the front of the home.
- Yes, fresh flowers can make a difference.
- Install a new front door. Front doors tend to look worn over time. Some styles are not right for the home. If the style is right, but it does not seem welcoming, then put a coat of stain or paint on the door to make it stand out (in a warm, positive way).
- What is the condition of the garage door? Read about front doors and do the same analysis.
- What is the condition of the gutters and downspouts? I always feel like if I do not notice them it is a good thing. Full of debris or hanging without the correct support gets noticed and reeks of poor maintenance.
- What does the mailbox look like? I bet 9 out of 10 homes I look at for investment will need a new mailbox. When a buyer is driving down the street in many communities, the mailbox is their guide to the correct home since it contains the house number. If it looks terrible, it is a terrible first impression. An impression that is very inexpensive to fix.
What Next To Improve Your Return on Investment?
Our next post on this topic will review easy ideas for making the inside more appealing. Increasing the return on investment is your goal. What does a potential buyer see after stepping through that new front door entrance?