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Thursday, May 24, 2018

Budget Remodel Before Selling-Is It Worth It?

So this blog is completely different from my travel blogs. This is about getting into real estate to make extra money. Sometimes, you have to take financial risk to yield high rewards...so you can fund those trips! 


I want to share my experiences in making small improvements to your home that can greatly affect the price point which leads to higher profit when selling. First home was purchased as a short sale and total remodeling investment was about $5000. The amount of time lived there was about 3 years. When it came to selling, profit was about a six figure return. 

I fixed a 3 bedroom/2 bath vacation rental in Volcano, HI. It was reminiscent of a grandmother's home with all her knick knack that she collected over the years. However, it was built in 2006 and purchased in 2013! First off, if you have a vacation rental stick with the basics. No one is there for your knick knacks. Only add things that will add value especially if it's not your primary residence. It was listed on the market. After receiving no offers after 5 months, the sellers decided to reach out to me to reassess the home and strategize how to sell the home at the same and desired price. I took into account the feedbacks from the showings to make it more appealing to potential buyers.

I originally budgeted for about $1000 but ended up spending $2300 with a 3 week time frame. 
While decluttering "fixes" were uncovered that was done poorly and issues that needed to be addressed. My suggestion is before fixing anything, take a close look to see if major issues need to be fixed that might come up on the inspection report that might affect the selling price. So, anticipate that you will go over budget. To me the "poor fixes" that were visible gave the impression to buyers that they will uncover more issues. 
  • The majority of the budget went to painting. When it comes to making the home look brand new again, I always consider painting. When done properly home will be brighter and cleaner. I originally budgeted $300 for paint and supplies (about 1200 sq ft) but spent an additional $300 to paint the ceilings, baseboards, and door trims. The home was originally painted a cream color and the master bedroom a green color that crept up to the ceiling. Although, home was painted neutral colors somehow when entering the home it felt like there wasn't enough light coming through. Please stay away from swiss coffee or cottage white paint! I went with white paint with green tones reflecting all the greenery outside the home.
  • The other major fix was the Master bathroom. Removed the wood laminate floors, re-tiled the floor, new sink vanity (local Norfolk pine from Kamuela Hardwoods), change the light fixture, painted the walls(Beher Silver Ash semi-glossy), painted the ceiling, replaced broken toilet, & new mirror for vanity).
  • Removed the majority of the furnitures, decorations that didn’t suit the area, de cluttered/ removed anything that was contributing to the mold issue. 
  • Decorated the home with Hawaiiana paintings from local artists that suited and reflected beautiful Volcano area. Rearranged some of the existing furnitures. Volcano is always wet so used 100% linens and ramie for beddings and pillow covers for their antibacterial, anti fungal, and absorbent properties.
  • Removed all the hodge podgy things that didn't suit the home. People commented that it was colorful, look and felt dirty, beachy theme that doesn't suit the area, dark, uninviting, and quirky.
(Living Room BEFORE: removed weird tile board behind fireplace and removed furnitures)

(Behr Paint & Primer Eggshell Arcade White. Accented with natural decor and Volcano/Hawaiiana paintings to reflect the area. Flowers and foliage were all from the yard)

Changed light fixture in Dining (Ikea Ranarap)

Master Bedroom BEFORE

AFTER
  
Master Bath BEFORE

AFTER



At the end, while during renovations, a couple that previously looked at the home when it was on the market came to look at the home and liked the small changes we did. Result: Rented about 10 months(made additional $300 per month) and purchased it at the desired price. 
So is it worth it? Yes, I think making these small and low cost renovations is worth it. I hope this helps and inspire you to consider making small changes that is budget friendly to your home before selling.

enJOY!











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