Change the roof on a BRRRR?

Question

One author recommends replacing the roof on houses that you are going to BRRRR. The logic behind this is that the appraiser will give more value to the home and you have just affectively financed a new roof. If that happened on a regular basis I can see how that logic would be solid. On the other hand there are a lot of appraisers that are simply going off comparable sales square footage etc. So let’s say your roof had 10 more years left on it easy and you changed it before the refinance and the appraiser did not raise the value of the property due to the new roof. In a case like that I do not see the benefit of changing a roof that still has life left in it. What are your thoughts or experiences with changing roofs in hopes of having a higher appraisal?

Kevin Sobilo · Answer

@Joe S., for a single family or small multi-family an appraiser uses a comparable sales approach to determine value. Yes, there are adjustments for the differences between the comparable sales and the subject property (your property), but they are relatively subtle adjustments because they are using "comparable sales". Houses in similar condition etc as yours.

If your roof was at end of life, I would agree that there is some advantage to getting the new roof rolled into your long term financing with the small side benefit of MAYBE a little higher value on the home.

I would not however replace a roof that I didn't need to replace. A 20 year old roof is fine. Also, even a 20 year old roof that most people would think needs to be replaced by the 25 year mark can often be nursed along well beyond that by monitoring it and doing minor repairs. Getting 30+ years out of your roofs saves a lot of money versus replacing them at 20-25 years over the long run.

So, I'm generally on board with what @Lara White wrote.

Lara White · Answer

@Joe S. I wouldn't replace a roof unless it was lender required or not insurable...I'm curious as to what others will say coming at it from an appraisal/BRRRR standpoint!

Joe S. · Answer

Thanks for the input.:)

Joe S. · Answer

Well the lender is definitely not requiring it most of the time.