All Forum Posts by: Moritz Bode

 Figuring the highest value increasing repairs can only be done case by case. It all depends on the sub-market and the existing improvements. Sometimes the highest value increasing repair is to not make any repairs. Sometimes it only pays to repair one component if other components are also repaired. What you need is intimate market knowledge specific to the particular property, not some fantasy magical universal mathematical formula to apply to all property components in all properties.

The value of real estate is a function of the whole. The value of real estate is not a sum of components.

What you need to do is look at other homes in your market and see what others have done and what they end up getting for their property, both low and high ends of the spectrum. In this way, you can establish what you might expect to get if you do nothing, and what you might expect to get if you do everything. Establishing what you can expect to get somewhere in the middle is a crap shoot, and it actually comes down to the individual buyer, not some formula. It's about establishing what is typical and generating a strategy based on that, with the understanding that the world of real estate is not typical and always variable.

This is why realtors generally recommend you repair what is broken, because all buyers dislike things that are broken. This is why they will recommend neutral paint and finishes, as these offend the least amount of people. This why they do not recommend you repair a property with your own tastes, as your taste may not be (and usually isn't) universal.

Trying to understand all of this component by component is the wrong approach. You have to assess each property as a function of the whole.

For instance, if you have disgusting carpeting, it might pay to replace it. However, if the rest of the house is a ****-hole too, why bother? All you did is put lipstick on a pig. But if the rest of the house is nice and the only thing that stands out is that disgusting carpeting, it is likely a good investment to replace it.

Last and not least, sometimes the "value added" does not come back in dollars, but rather comes back in marketing time. This idea lends itself to the fact that all real estate can probably sell for more if it listed it long enough. This is why all appraisals are contingent on a marketing time frame for instance "$100k with an exposure time of 3 months".

@Moritz Bode

If I had to pick one it would be the siding. If the exterior has curb appeal that's ideal in any market to any buyer.

@Moritz Bode

LVT (luxury vinyl tile) is the way to go for rentals. It gives you the look of wood with the durability and cleanliness of vinyl. We use the water resistant type that has a hard PVC backing and the planks lock together. Had a leak in water system after installing floor, the place flooded and we just shop vacuumed it out. No harm done. It comes in a wide variety of wood tones and now they’re starting to make it available with stone looks as well. We buy it at Lumber Liquidators for about $1.60/square foot and install it ourselves (husband and I). I think LL offers installation for about $2/sq. Ft. It’s not very difficult to do at all. There are glue down systems as well but those are thinner and you have to worry about having a level surface before installing.

Contractors in Fla must have a license to work. If you hire a contractor the first  thing you do is ask for a copy on his license. Go on to the state site and check out his or her license for any complaints and that it is up to date. If you hire a contractor have a contract as to what you both agreed on and a copy of his or her liability insurance. Protect yourself, if the contractor refuses do not hire the contractor.

@Moritz Bode

Rehabbing kitchens and baths give you your best return.  One return we don’t hear enough about is if you can find a two bedroom home with over 1000 square feet; it will have potential to convert to a three bedroom it’s a guaranteed $15,000 value increase.

 I don't know what to recommend. There is another thread going where flooring is being discussed, but I can't remember which one it is.  But, there are a lot of really knowledgeable people here who can give you advice on that.  I just know as a PM that tenants always wanted hardwood floors.  And I'm including anything that's even similar.  Basically, they hate carpet and a lot of people don't like tile and linoleum can chip and not be a color that people like, etc.  

I'm shopping for property to buy in the next year and I just cry when I see great hardwood-type flooring in the living area and some carpet I hate in the bedrooms.  Oh, and I really don't like the new popular gray-ish colored hardwood-type flooring.  It's going to get dated quickly.  I think you're better off to just go with a traditional brown color that doesn't go out of style.