Best ROI on upgrades for SFR?

Question

Hello everyone! My brother and I bought a SFR recently and were curious what you have found is the best ROI for upgrades in the Denver area?

Adam Ferro · Answer

@Theresa Worsham I should have been specific. We are following the BRRR Strategy so idea is to rehab the property then buy and rent out the house. Thank you for the info!

Bill S. · Answer

@Adam Ferro you might share a little bit about your price point. What you thing the ARV is. What features flip comps have? Bottom line is that paint has the highest ROI in pretty much any price point. Hopefully repainting was already in the plan. I've come across a number of articles over the years that discuss this issue. I thing NAR (Nation Association of Realtors) publishes data on that kind of stuff. I seem to recall a trade association for home remodeling contractors that also does something similar.

Bottom line is that there are somethings that must be done to resell a property to an end user if that was not the case, you would have gotten outbid by an owner occupant since most have no profit in their home buying equation.

A good sources is a buyer's agent that is representing a lot of folks in the area where the home is located. They know what buyers want in that neighborhood and price point. What you "have to have" to sell for top dollar.

Sorry I don't have more specific data but that's kind of the way it is.

Theresa W. · Answer

@Adam Ferro Ah, my mistake - I thought you were going to hold the property long term. If you're flipping, then yes, pull it up after your contractors are done with higher up things like paint, etc.  My experience with vinyl over hardwood is that it's a real PITA to remove if the installers glued it down.  It might damage the wood in scraping up the vinyl, but IMO, it just builds more rustic character.  Congrats on the deal!

Theresa W. · Answer

I've found durable flooring to be one of my best expenditures, but what type depends on the house.  If there's original wood plank flooring underneath a carpet that's trashed, then a light refinishing can be affordable, even if it's got some blemishes which just contribute to its "character".  Otherwise I like luxury vinyl plank in kitchens and baths which is a fast upgrade, easy install and most of the time, simple to fix if necessary.  I know some folks like carpet, but solid floors are simply easier to clean and present well to new tenants.

Max T. · Answer

@Adam Ferro

For a flip in an expensive market? Probably fancy upgrades, like smart thermostat and doorbell. Maybe integrated Alexa setup. A few outlets with USB plugs in key locations.

The standard answers: main or bedroom level laundry. Central AC, tiled kitchen and bathroom floors/backsplash.

Adam Ferro · Answer

@Theresa Worsham Thank you! right now it looks like there they have vinyl that is on top of hardwood floors. I think the plan is to keep them covered till we are ready to sell. Pull up the vinyl and refinish the hardwood. What do you think?

Best ROI on upgrades for SFR?

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