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Ask Adam: Upgrade Your Home Like a Flipper

by ARLnow.com | December 26, 2012 at 12:05 pm | 3,115 views | 21 Comments

This periodic sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013. Please submit follow-up questions in the comments section or via email.

Question: My wife and I recently purchased a house in Arlington and plan to make some improvements to it over the next couple of years.  Can you recommend which improvements will bring us the most value when it comes to resale value?

House flipping isn’t just a popular TV show genre (Flip This House, Flip That House, Flip Men, Flipped Off, etc.), it can also be a profitable mindset to adopt when considering home improvements.

Here is a list of the top 5 improvements in order of what I think Arlington home buyers will value most. Each of these improvements can have wildly varying degrees of style and quality. You will have to weigh the options against your budget when making these choices.

Home kitchen (photo courtesy Courtland Homes)1) Kitchen – A nice kitchen is not just a box the potential home buyer is checking off, it is often where the emotional attachment to the home begins. Granite counters and stainless steel appliances used to make a home stand out from the crowd. Now they have become a minimum standard in Arlington real estate.

If you are on a tight budget, I recommend exploring some of the options available at Ikea. If you are not on a tight budget I recommend choices that will help your home stand out such as eco-friendly materials or exotic stones and woods. Amicus Green Building Supply in Kensington, Md. is a great source for eco-friendly options.

2) Bathroom — I’m sure it is no surprise that bathrooms are a close second to kitchens. Many home buyers appreciate a nicely updated bathroom. The level of your bathroom upgrades should correspond to your target audience and your “competition.” Consider the homes you looked at while shopping for the one you ultimately chose. Which bathrooms stood out to you?

Some savvy shopping can save you a lot of money on this category. I’ve even spoken to builders who are now relying on the internet to purchase vanities from places like Overstock.com.

3) Flooring – There are people out there who want carpet, but they are in the minority. Whenever possible go with a hard surface. Hardwood is usually the preferred option. Alternatives like bamboo and cork are also very nice. I would stay away from ceramic and marble in the living areas of your home. They are expensive and not appealing to the masses.

Be sure to research the durability of the flooring you are considering. Nothing is worse than investing a lot of money only to have it damaged by pets and high heels.

4) Landscaping – Too many people underestimate the power of tasteful landscaping. You can use trees and shrubs to create privacy where needed. You can score big time with an area that can be used for entertaining outdoors, such as a deck, patio or screened porch. Remove or replace the chain link fence if you have one. Beyond these basics, you can begin adding beauty with the lawn, plants, trees and shrubs.

Consider low maintenance drought tolerant greenery, because most of us don’t have a lot of extra time to be maintaining a beautiful yard. Even if you do have the time, chances are the people who buy your home will appreciate knowing that it will not be a part-time job for them.

5) Efficiency – This is somewhat of a catch-all for windows, insulation, HVAC systems and other upgrades you can make to increase comfort and reduce utility bills. In some cases it is just a matter of bringing your systems up to current standards (i.e. a 1950’s house with original insulation or a heating/cooling system on its last legs.) As I’ve recommended in a previous article, you may want to start this process with a home energy audit. Let an expert design a strategy for getting back the largest gains for the dollars you invest in your home.

The nice thing about efficiency upgrades is that they will start paying you back right way with lower utility bills.

Please remember that part of the value in the improvements you will make to your home is the enjoyment you will get from them.  Therefore, make the improvements sooner than later, so that you can enjoy them longer.

Happy holidays!

Photo courtesy Courtland Homes

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

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  • internet tourettes

    Adam,

    Why do all of the updated houses seem to have the same brown tile (on the bias) kitchen floor, builder grade marble and taupe paint? I realize that a lot of sellers are trying to maximise their return on investment but most of the improvements I have seen really dont seem to add a lot of value.

  • Sim City

    why do people obsess about marble and stainless steel but then go out to eat all the time and never cook. Grandmas kitchen was lineolum and a wooden table and she done fed the thrashers.

    • dk (not DK)

      +1

  • Sim City

    Remember: most analysis finds that houses aren’t really a great investment. Think of them as a place to live

    • R. Griffon

      On a national scale, yes. But that’s of nominal value here b/c all real estate is local. While I’d agree with you that a home should be a place to live first and foremost, there is also a lot of good gains to be made selling a house in ARL with a good location and amenities. And if you plan to stay in your home for a while, such upgrades will increase your enjoyment of the house while potentially giving you access to additional capital (in the form of HELOCs, 2nd mortgage, etc.) at today’s historic low rates.

      • Sim City

        What you say makes sense — and I think your point about increasing enjoyment of the house is very apt. Maybe it’s the framing of this piece that bugs me: “upgrade your home like a flipper”. The more subtle point may be upgrade your home so you can enjoy it more — and so that the considerable investment makes financial sense if and when you do decide to sell the home. t.

  • High GS

    “why do people obsess about marble and stainless steel but then go out to eat all the time and never cook. ”

    Because as beltway bandits all know, it is not what you do, but how you look while you are doing it…..

  • Flipiador

    Better question HOW TO GET A LOAN TO PAY FOR IT? or HOW TO FIND A REASONABLE CONTRACTOR.

    After dropping 20% down plus some more cash on closing draining your savings, how the heck do you afford to fix the 1950′s mess that these expensive POS homes have? Try to redo a kitchen or hvac and you end up rewiring the entire house. How the hell do you afford this?

    So you go and buy something redone and pay top dollar for these sucky builder upgrades, seems like a lot of the tile just comes from costco and the same style cabinets all over (haven’t figured where those come from). Yet, you pay like it got shipped from Italy.

    On top of that, the county milks you in permits and paperwork if you try to add a room, bathroom or what not. How about a little insight on how much grief and cost they county adds on to your project.

    The above advice was just bla. Get into the meat of issues Adam.

    • that guy

      this! Finding a contractor couldn’t more obscure or difficult to figure out… advice??

    • Dezlboy

      Fipiador, get a grip. Adam’s answering a specific question, not holding a seminar.

    • Get Real

      Flipiador says “Better question HOW TO GET A LOAN TO PAY FOR IT? or HOW TO FIND A REASONABLE CONTRACTOR. ”

      This is exactly why you can flip a house. Not everyone has the means to do a renovation.

    • The GC

      If you add a bathroom or other DFUs (drainage fixture units) over 11 I think, the county adds $3700 to pay for an upgraded water line and meter+ permit fee+ actual cost of installing the new line. So, if you add a new bathroom the cost is X , lets call it $15,000 for the bathroom work and material + on the low side $11,000 in county upgrades/ fees, etc. for a total of $26,000. Of that 42% of the costs are county mandated. You could extrapolate for the cost of a new home and see one of the reasons they cost do much.

      • Citation Needed

        The GC Said

        the county adds $3700 to pay for an upgraded water line and meter … on the low side $11,000 in county upgrades/ fees, etc.

        How on Earth did you jump from $3,700 (IF you happen to go over some threshold for bathrooms), to $11K? It sounds like you’re making numbers up.

        Please cite costs for the other $7,300 with links to County websites.

        • The GC

          It is not IF but when you go over the threshold. You are not adding any value to a house if you stay at the 11 DFUs that is one kitchen, one bath and not even a full laundry room. It is when you go over, you will have to add a new water line. County will charge you $3,700 at the DES counter. Then there are other costs associated with the permit. You can go look through the county websites for links, I don’t care to prove what I know to be true. Then there are the actual costs for installing the new water line. You have to dig up a min. of 2′, add gravel a new copper line, pay for the site work, the plumber, etc. To hook it up. And this is on the low side.

    • R. Griffon

      How the hell do you afford this?

      Obviously most people don’t renovate right after buying unless they already have the money. I’d think most would wait and save up a few years before starting a major project on a recent purchase.

      HOW TO FIND A REASONABLE CONTRACTOR.

      My best advice would be to ask around. Talk to friends, neighbors, and co-workers for referrals. If you go for a non-referral, get bids from multiple contractors and look in to references and past projects of similar scope.

      the county milks you in permits and paperwork

      I guess that depends on your definition of “milks.” I’m starting a major renovation and don’t think my County fees were bad at all (<$1,000).

  • http://nationleprechaun.com/ jinushaun

    Kitchens with granite counter tops and stainless steel appliances = zzzz. Next!

    Otherwise, generally sound advice for deciding on what to upgrade to maximum flippability.

    However, I’m with Flipiador. This advice is pretty much common sense. The real question is how to make it happen. Renovations are expensive and contractors can be a nightmare. The houses around here are so old that they’re in desperate need of reno, but they’re also so expensive that after the 20% down, you don’t have money left for anything.

    • dk (not DK)

      If I never see another stainless steel fridge it will be too soon.

  • Abe Froman

    So, I totally dig the hardwoods in the main level of a house, but it drives me nuts when I go look at a house and 100% of the place is hardwood flooring. I hate it in the bedrooms and I don’t care for it in the family room, basement/playroom area where kids are going to be rolling around on the floors.

  • R. Griffon

    Solid, common sense advice as always. Thanks Adam.

    I’d ask one follow-up: Are there any particular features that you think differentiate buyers in this market from standard convention? For example, features that make an Arlington property REALLY marketable here which would only add nominal value in other markets? Or conversely, upgrades that do well elsewhere that just aren’t worth it here?

  • PikerGirl

    For reliable contractors, subscribe to Angie’s List or Consumer Checkbook. worth the money if you are really looking to hire someone. Or subscribe to one or more local Arlington community listservs (like I subscribe to Arlington22204 on Yahoo Groups) and ask for the list for recommendations.

  • Poppy

    For finding good contrators, I agree with earlier comments—–ask friends/neighbors, subscribe to lists. My local NextDoor listserv (AEFCCA) has recommendations from my neighbors, and we are all responsive when someone asks about a specific need.

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