Savvy home flippers are really starting to get the hang of the resale process. According to the FlippingMastery blog, profit and returns on investment were up in 2015, even though the total number of flips was slightly down. What does this mean to you? It means your competition is getting a handle on what works and what doesn’t, so if you hope to stay competitive in the marketplace, it might be time to up your game. But how?
Every year, the National Association of Realtors releases the Remodeling Cost vs. Value Report to give homeowners guidance on which improvement projects net the biggest ROI for the least investment. You might be surprised to learn that the projects topping this year’s list had nothing to do with kitchens or baths, but instead focused on energy efficiency and curb appeal.
Project #1: Add Attic Insulation
According to the report, piping a drafty attic full of fiberglass insulation provided a whopping 116.9% ROI when done professionally. More specifically, by spending just a little over $1,200, you can net back over $1,400, as long as you reach at least an R-30 insulation value. Considering this is one of the smaller projects on this list, it’s good news for flippers like you who are operating on a limited budget.
The biggest perk for home buyers who score a newly insulated attic, of course, is the savings they’ll see on their monthly utility bill, but the happiness doesn’t just stop there. According to the EPA, this project provides additional benefits as well:
- It helps reduce outside noise.
- It makes a home more impervious to infestation by insects.
- It reduces indoor allergens.
- It makes it much easier to control the humidity inside a home.
Project # 2: Install Manufactured Stone Siding
Another worthy project involves replacing the lower one-third of a home’s exterior siding with manufactured stone. Although this home improvement can cost upwards of $7,000, you’ll recoup nearly 93% of that at resale when prospective home buyers see the finished results. It will also help your home get more buyer traffic, since this modern touch is trendy and highly sought after.
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Project #3: Replace the Garage Door
Lastly, a simple garage door will net you nearly a 92% ROI. This includes a new embossed steel door that rolls smoothly along a new galvanized steel track, and it doesn’t even have to be an insulated version. As long as it looks nice and works well, you can expect potential home buyers to be infinitely pleased with the results.
Of course, if you want to go that extra mile and purchase a door that is insulated, consider the following statistics published by Powersmith Home Energy Solutions:
- Energy-efficient homes sell an average of 18 days faster than non-energy efficient homes.
- 81% home buyers admit that energy-efficiency is a determining factor in choosing one home over another.
- The average home buyer will pay over $7,000 more for a home that’s going to save them $1,000 on energy costs each year.
A successful flip is all about knowing where to spend your money to bring in those multiple offers, so make sure you have a handle on what works and what doesn’t in your local market. If you do, that fixer-upper you just scored for a song might end up being your best investment so far.
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