Rehab Priorities That Add Most Forced Appreciation (ARV)

[Bart Blair]

My son and I are going to buy a property that he will live in for a year while we prep it to be a rental. We're looking for something off-market that is liveable but needs work. What are the things we should prioritize for rehab that will give us the most forced appreciation?

[Andrew Postell]

@Bart Blair I see you have some comments above but the answer is really dependent on what the comps are for that neighborhood. Usually when we are buying an "off market" property that fits the BRRRR method it's the numbers that are of importance - not the location. Sometimes you property might be on one side of the town or the other. Now, usually we are targeting properties that rent well (sub-$300k in most markets) and most of the properties in that type of a neighborhood aren't going to demand quartz counter tops. But some neighborhoods might demand different things though.

Here's some examples of what I mean:

- Enclosing a garage - if the similar properties in a neighborhood have them, then yes, run the numbers and see if it makes sense. But if you are the only property with an enclosed garage and all of your comps have garages...you may actually HURT your ARV.

- Granite Countertops - same thing here.  If your comps have 'em, you better have 'em too if you want that value.  If they don't, then no need to spend the extra money.

This can go for adding bedrooms, baths, pools, decks, etc.  You should not OVER IMPROVE your property based on the neighborhood nor should you UNDER IMPROVE it either. 

I hope all of that makes sense.  Feel free to ask anything else if you need. Thanks!