4 Repairs That You Should Not Touch

When it comes time to rehabilitate real estate investment properties, there are a number of repairs that need to be done. Some houses may need a new coat of paint. There are other repairs that are going to be more obviously necessary. However, there is also a great deal of elective work that needs to be done and deciding which tasks are worthwhile can be challenging.

Getting the most bang for your buck is always crucial. That’s why this list is here to assist those who are making real estate investments. Rehabbing a property is all about spending your money as wisely. Let’s take a closer look at the four real estate repairs that should never be touched.

1. Repairs That Do Not Offer The Proper Return on Investment

Before any real estate repair is made, the investor must stop to consider the potential return on their investment. The National Association of Realtors has done the necessary research on this topic and their findings will surprise you. There are certain repairs that are going to have a strong effect on the price of new housing and other repairs that are not nearly as helpful.

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For example, adding a full or partial bathroom allows for an increase of 15 to 23 percent. An above ground swimming pool, on the other hand? Zero increase. A fireplace, garage or central air conditioning are also investments that can provide an increase of over 10 percent. Meanwhile, a professional office or an in law suite will actually lead to a decrease.

These renovations also need to be considered on a regional basis. If the property is located in an area that is prone to flooding, basement renovations won’t increase the return on investment. Central air conditioning will be more valuable in locations where the residents are forced to contend with muggy conditions on a regular basis.

2. Overdoing It

There is such thing as fixing up a real estate investment property too much. A luxury house is going to need a certain level of fixing and investors should feel free to go all out with these purchases. However, the middle class rentals do not need the same level of work and this is something that all investors should definitely bear in mind.

A middle class rental does not have to be spectacular. It simply needs to be functional. Use quality materials and avoid the urge to pinch pennies, though. Flat paint and builder’s grade carpet are always a no go. Going all out with customized cabinets, high-end appliances, bay windows or crown molding is not recommended in these instances.

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If the property is middle class, adding high end materials and fixtures is not going to provide the investment return that you are looking for. Split the difference between the cheapo materials that will need immediate replacement and the expensive materials that will soon become a sunk cost.

3. Additions That Do Not Fit The Property

If the repair is weird and does not seem to fit the property, this is often a sign that it needs to be avoided. Adding additions to any real estate investment is typically not in your best interests. Finishing a basement is not worthwhile either. Those who do decide to finish a basement or make an addition should always consult with an experienced contractor beforehand.

There are other upgrades that appear to be worthwhile and are not. Bedroom additions do not add the sort of value that investors expect. In many cases, these “additional” bedrooms are either too small to matter or only accessible if the person goes through an existing bedroom.

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Adding rooms this small only serves to let potential buyers or renters down. Place yourself in the shoes of these people when you make these considerations. Would the addition to the home make you more likely to make a purchase or sign a lease? If not, this is a sure sign that you do not need to make these sorts of changes.

4. Upgrades That Cause More Hassle Than They Are Worth

Some upgrades seem great on paper but in reality? They cause far more hassle than they are actually worth. A skylight might look nice but did you know that they tend to leak during periods of excessive rainfall? Swimming pools also seem like a great idea until you stop to consider all of the problems that they add to the equation.

The aforementioned National Association of Realtors study states that swimming pools add zero increase to the return on your investment, not to mention all of the liability issues that are bound to take place. There are also various laws that are going to come into play. Sometimes, it may make sense to put in a swimming pool if every home in the area already has one but in most instances, it does not.