Renovating a house for a profit?
First, eliminate the 'Yikes!' -- Page 2
Based on that typical experience, Berges formulated
the following guidelines:
- Spend money on what can be seen vs. what can't
- Fix up the exterior first, then the interior;
- Focus first on what Berges calls the "Yikes!"
appeal -- clutter, trash and bad smells that drive down a home's
"Visibility adds value," Berges says.
"The improvements that are most visible are the things you
need to focus on."
What you see is what pays off
This means that, if you have $10,000 to spend, and you can
either spend it all on a new roof or all on repairing a cracked
foundation (but you can't do both), you should replace the roof
because it can be seen. Whatever your budget, put a higher priority
on improvements that can be easily seen, because those give you
the best bang for the buck.
"People expect the foundation, plumbing
and wiring to work," Berges says. "If they don't, they
detract from value. But fixing them to bring them up to code doesn't
necessarily add value."
Because an unkempt yard and ugly exterior can cause
prospective buyers to drive away without going inside the house,
you should work on those first. Clear up clutter. If you want to,
hire day laborers to remove that old engine block in the driveway
and reattach that rain gutter that fell two years ago and has been
lying by the side of the house ever since. Then concentrate on landscaping.
Prune hedges, trees and shrubs, especially if they obscure the front
of the house. Paint. If the roof is dirty, hire someone to power
From the curb, "the roof takes up 30 percent
of what you see," Berges says. "If you have a nice-looking
roof, that goes a long way in curb appeal for the house."
Cut clutter, clean
Maybe you notice that Berges isn't recommending that you break
the bank -- just that you spend a little time and money to make
the place look better. You should do the same inside the house --
reduce clutter and clean everything. If you own a pet, invite a
non-pet owner inside the house to sniff around. You might be inured
to the smell of your Weimaraner's urine, but the stench could make
a buyer retch.
When Berges buys a house that he intends to fix up
quickly and sell, he almost always has the interior repainted wall-to-wall
and has the carpets and vinyl flooring replaced. Once, when he and
his wife sold their own home, they didn't replace the carpets and
they regretted it.
"We thought that by offering a flooring
allowance, a family could move in and select their own flooring,"
he writes. But he discovered that buyers don't want to select their
own flooring. He already had bought a house and didn't want to be
stuck with two mortgage payments, so he unloaded the old house quickly,
for $10,000 less than he thought it was worth.
Deal with the hassle, keep the profit
"For half that amount, we could have replaced all of the
flooring and sold the house for its market value," he ruefully
writes. "People don't want to fool around with painting and
replacing carpet and fixing the house up. In the world of fast food
and instant gratification, people just want to buy a house and move
Berges's book is geared toward middle-class homeowners.
On the upper end, buyers expect well-kept yards and painted walls,
of course, but they often yearn for amenities that middle-class
people might not expect. For example, one of the hot trends in the
Hamptons on Long Island, says architect Marcia Previti of Gillis
Previti Architects, is for two dishwashers in the kitchen. "You
might reserve one for glassware and one for pots and big dishes,"
Adding a second dishwasher might be a sound investment
in the Hamptons or in Beverly Hills, but it would be a waste of
money in Toledo or Peoria. Berges's final piece of advice is to
keep up with the Joneses, but "you don't want to overimprove."
Berges lives in a neighborhood of concrete driveways.
A neighbor recently spent $28,000 replacing a concrete driveway
with brick pavers. In a high-end neighborhood, that would be a cost-effective
use of money, but Berges' neighbor won't come close to recouping
the cost of installing the beautiful driveway.
When you're trying to decide how to spend remodeling
money, Berges recommends seeking the advice of an experienced real
estate agent who is familiar with your neighborhood. A licensed
appraiser should be able to provide guidance, too.