Denver Real Estate: Remodel or Not to Remodel? That is the Question!
Remodeling can substantial increase the value of your Denver Real Estate or Investment Property
Whether you are thinking about selling your home or have an investment property, remodeling can substantially increase your value and your rent potential. This is an example of how Ronald Jones, a well-seasoned investor, decided to remodel and maximize his increase the value of his property and rental potential. He specifically targeted the areas that will provide the highest rate of return: Kitchens and Bathrooms. This work was successfully completed in collaboration with Contractor and Remodel Expert, Johnathon Farmer, Owner of Frontier C & M. Watch this video to see how you can maximize the value of your property!
Before you rush to the local Hardware Store and buy up all their supplies for your remodeling idea, here are some steps you should consider first:
1. Tip #1: Know Your Budget
How much can you truly afford to spend. This means, how much expendable cash do you have on hand? This is an important number because you don't want to create credit card debt from a remodel - it defeats the purpose. You can achieve any scale of remodel - you just have to have an honest conversation with yourself and ask "What Can I Truly Afford?" This number will determine of what resources you have to work with.
2. Tip #2: Begin With The End In Mind
It is ok to dream of a grandiose plan to turn your home into a Beverly Hills Villa. Dreaming is healthy and allows for creativity. However, for the sake of adding value to your home, you typically do not want your home to become the nicest house on the block. This is a process called appreciation. The larger, nicer surrounding homes in your community lead the appreciation, pulling the smaller lower valued homes up with them. In other words, you don't want to go above the standard of the surrounding homes; otherwise, you might find yourself up-side-down - with a complete remodel and seeing only a portion of the money you invested turn into real value. As a rule of thumb, remain objective about how your remodel will increase value. This may limit the use of luxury materials and features that are above the standard for your neighborhood.
3. Tip #3: Break the Remodeling Into Phases
Few of us are fortunate enough to be able to afford a complete remodel all at once. Contrarily, remodeling in phases risks your final product turning out "pieced together" with varying themes, colors, and styles due to ad-hoc decision making. As long as you have thought ahead and developed the long term plan already choosing the colors, tile, trim, and fixtures for now and the future- you can successfully complete the remodel in phases over time. For example, start on the kitchen and the following year finish a bathroom. Make sure that the theme is similar and your color schemes/styles go well together. It won't look like a mixed batch with thoughtful, and careful planning – this route can be much more affordable!
4. Tip #4: Remodeling Increases Value
Whether you want to sell your home or you have an investment property, remodeling will provide you with a return on your investment. A remodel will allow you to sell your home at a higher price point or also increase your rent potential. As a general rule of thumb Kitchens and Bathrooms increase the most value, but are also the most costly. Be sure to reach out to a Real Estate Professional who can consult you how to stretch your budget and maximize value!
If you have any questions about this topic, your Denver Real Estate Concierge is happy to assist you in anyway! After all, that is what a Concierge is for!