It’s a scenario you see time and time again. An investment property with incredible potential. If the home you are eyeing only had this or that, you could make a mint! While it may be true that certain renovations would increase the value of the property, it is also true that it will substantially decrease your profits.
Be aware of the following ROI spoilers:
Huge Remodeling Projects
A beautiful kitchen with a walk-in pantry may be exactly what a new homeowner is looking for. However, being the one to create it in hopes of catching the eye of a new buyer is not a wise investment. Small improvements that don’t cost thousands of dollars can be done to raise the value of a property. However, any major remodeling project should be passed on if you are looking to add value for a sale. Estimated costs almost without fail will increase due to unforeseen problems. Potential buyers may prefer a credit to repair instead so they can personalize their new home from the beginning.
Built-In Electronic Entertainment Systems
In-home movie theaters may look cool when you get a sneak peek into the home of a celebrity, but not all prospective buyers actually want one taking up space in their homes.
Adding a Bathroom
A home can never have too many bathrooms, but it is best to let the future owner put up the expense to add any new ones. You may only gain back half of your investment if you take on the project yourself. Not to mention some home buyers aren’t looking for a house with fireplaces next to the Olympic size jacuzzi in their bathing room.
Adding a Garage
The expenses entailed in adding a garage to your home investments will cost more than it’s worth one you figure in all of the expenses the project entails. Leave the option of adding a garage to the future owners for your higher profit margins. The costs included in building a garage will really add up once you figure in the permits, materials and construction that needs done.
Adding a Pool
Leave the choice of a swimming pool to the future owner of the home with the perfect sized back yard. There are families that would rather have the yard space for their growing children, and others who don’t want to deal with the maintenance that a swimming pool requires. Suggesting where a pool would fit nicely should be the extent of your involvement in adding a swimming pool.
Don’t let the potential of an investment property blind you to the costs that are known to be ROI killers. A little bit of research and consultation with a firm like cash home buyers Dallas will help you make wise decisions for your investment properties.
Ansarullah is a freelance writer and blogger