House Flipping: Should You Go Big or Small with Remodeling?

It is all too easy to get addicted to house flipping shows on television. We sit back and watch a dingy old house get completely transformed in the span of 20 minutes, and then the house inevitably sells for above asking price, and the flippers pocket a nice profit.

But what we often don’t see (or fail to notice) is the massive construction crews brought in to get the job done in a matter of days. Are these builders on the payroll of the flippers or the network? No one ever goes into that level of detail. What about scheduling problems and cash flow issues? Those just don’t happen. Granted, there’s always some problem or other – whether real or fabricated – that adds a little extra drama to the show, but the problem is always fixed with little to no explanation before the big reveal of the completely remodeled, perfectly staged, expertly lit, and professionally photographed home.

Anyone who has made their career flipping houses can tell you that this glitz and glamour does not reflect the day-to-day reality of house flipping and remodeling. Sure, it would be fun to find a complete dump and completely make it over with new windows, knocked out walls, custom tile, and anything else you can think of. But those sorts of major renovations rarely pay off. What usually makes the most sense is finding the smallest ways that you can restore a space and make it substantially better than it was, but not necessarily its absolute best.

Now, we’re not advocating for shoddy workmanship or cutting corners. The work itself needs to be done well, but when it comes time to pick kitchen drawer pulls, the ones that you can get on clearance are almost always the better choice than the designer pulls that cost ten bucks a pop, particularly when flipping houses at the lower end of the market. And this principle expands out to bigger decisions, as well.

For example, it would be nice to replace that iron banister with a new wood one, but simply painting the old banister may make the foyer substantially brighter and save you both time and money.

House flippers – again, particularly at the lower end of the market – need to always think in terms of better, not best. Don’t think about what you would do in your own home. Instead, think about what the majority of potential buyers would want and expect. Remember that many first-time buyers are looking for starter homes. They neither want nor need luxury finishes around every corner. Instead, they want a home that they can (a) afford, (b) be comfortable in, and (c) make their own.

That final piece is particularly important to remember. Larger renovations usually require bigger design choices that may or may not suit the tastes of potential buyers. For example, you may love the custom cherry cabinets you picked out for the kitchen, but those same cabinets may be too dark and formal for young families who expect to spend a lot of time – and make a lot of messes – in the kitchen. In their eyes, the simple white cabinets you could have gotten for half the price would have been the better call.

Of course, at the luxury end of the market, all of these house flipping tips must be reassessed, because the larger the profit potential, the more big, bold choices need to be made. But that’s an article for another day…

For now, when looking at starter homes to flip, simply remember: better, not best.