How to know when enough is enough for rehabs!

Question

Hey guys I have a triplex in the middle of port orchard wa that I am house hacking!

Our goal is to create $60k in equity the property definitely needs the work it's been neglected for the past 8 years.

I am a contractor with tons of remodeling experience and the finances to do most any work but how do I know when enough is enough?

Obviously we dont want to do granite counters but should I do tile backsplashes. I refinished the oak floors that were under the carpet.

(was cheaper then doing anything else)

Alex G. · Answer

When the property is brought to, or slightly above, the neighborhood standards.  Anything more would be a waste of money.

Jim Goebel · Answer

@Will Barnard

Hey Will, just wanted to dig into your statement about granite counters being outdated.  How do you figure?  They're still pretty, they are still made of rock, so last forever, and I guess... I'm confused.  That's the first I've heard of that.

I would guess you're on the Quartzite or Concrete counter bandwagon now?

@Samuel Fletcher Hardy

Samuel you'll need to adopt a ROI on an individual project mindset to be successful.  That'll help you as a contractor too.  Basically, when selecting those light fixtures (and the optimal light fixtures) you'll want to maximize ROI.  If you buy those $1000 fixtures that take longer to install, but they get you that extra $75/mo, you'd want to compare that to your $230 option that gets you bottom of the market rent.

Do that for every single design decision and you'll do great.

Will Barnard · Answer

Pretty tough for us to answer your question without more details. We don’t know anything about the property, the purchase price, the renovation costs, the exit value, or the market conditions in that neighborhood.

Also, generally speaking, granite is outdated but still a step up from tile counters or even worse, Formica.

Account Closed · Answer

I agree with Account Closed , it will all depend on what the numbers look like in the area and if it makes financially sense. This keeps it easy for you and keeps emotion out of it, if you can continue adding value and profiting then might as well keep going :)

Account Closed · Answer

You take a look at comps for the property and how long they took to sell. You do what the ones that sold quickly did and avoid what the ones that were on market for a long time did. Pretty simple.

Eric M. · Answer

How in the world does a contractor with tons of remodeling experience not know the answer to this question? What have your other clients out in their homes?

Will Barnard · Answer

The most simple, yet most accurate answer to the original question!

Will Barnard · Answer

Note that I said “generally speaking” and this would apply more so on more expensive homes and not your standard average homes as quartz would be a huge upgrade for homes in that asset class.

How to know when enough is enough for rehabs!

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