It’s that time of year. The weather is starting to break and people are spending their tax returns like free money. You know what that means…remodeling season has arrived! I was reminded of this last weekend during a trip to The Home Depot. For those who don’t already know, The Home Depot in Merriam is my home away from home.
Walking past the lumber aisles, I noticed their new selection of weathered shiplap boards. It doesn’t surprise me they’re selling these boards. You’re probably familiar with the popular TV show “Fixer Upper“, staring Chip & Joanna Gaines. Their distinctive style, or as I refer to it, Farmhouse Chic or Magnolia Style, is definitely en vogue. There’s also plenty of “Tear out that wall and add an island!” It’s a fun show. Probably the best of its kind, and certainly my favorite. However, many reality shows aren’t 100% accurate. They don’t always translate into the real world. This is often the case with home remodeling or house flipping TV shows.
TV Funny Business and Return on Investment
Before dropping major bucks on your remodeling project, you should consider whether or not you’re making a smart investment.
Putting money into your home doesn’t always provide a good return on investment. If your idea of a good return on investment is enjoying those upgrades yourself, that’s great. However, you might not get that money back if you sell your house soon.
You see, many of the financials you see on remodeling shows are incomplete and inaccurate. Another thing they don’t tell you is the investor’s “profit” is made on the purchase….not on the remodel…and not on the re-sale. That’s right. When an investor buys a “flip property”, they have to purchase the property at a steep discount to make a profit. In most cases, that discount is their profit. And that profit can’t be harvested without first completing all the work to the property. The return on investment for the just the remodeling work alone is almost always negative…especially when you’re paying for labor.
Many homeowners mistakenly believe any amount of money they put into their house will be a good investment. That’s almost never true for high dollar improvements and upgrades. Your return on investment is almost always negative on those. I often recommend not spending a lot of money to remodel your house if you’re going to sell it soon. Instead, you should stick with the basics and invest the extra money in remodeling your new home.
Here are a few more articles on making smart home improvements:
Is Remodeling My Home A Good Investment?
10 Low-Cost Home Improvement Projects
Prepare NOW To Sell Your House In Spring
Unsure what upgrades you should make? Thinking of buying, selling or investing in real estate?
Feel free to reach me below.
Justin Rollheiser – REALTOR®
Keller Williams Realty | Diamond Partners, Inc.
13671 S Mur-Len St | Olathe, KS 66062
Cell 913-800-7653
Office 913-322-7500
www.JustinRollheiser.com
Comments or Questions?