Rehabbing Projects That Will Boost Your Bottom Line This Spring


Which rehabbing projects warrant your consideration this spring?

Spring is slated to be one of the most active seasons our housing sector has seen in quite some time. In fact, the majority of those familiar with the real estate sector are expecting this upcoming spring to be busier than its predecessor. If for nothing else, momentum carried over from a particularly hot housing market in 2015 looks to be gaining even more steam. Due, in large part, to impending interest rate hikes, new mortgage rules, an improving economy and several other indicators, there is no reason not to suspect that this spring won’t outpace last year’s.

That said, rehabbers are particularly excited to get their hands on a deal before the season passes them by. I can only assume you share their sentiment as well, or at least you should. However, wanting to capitalize on this spring’s opportunities and actually doing so are two entirely different things.

You must have a plan in place if you are to experience any degree of success on your next rehab project. Not surprisingly, the best place to start is with your bottom line. If you are looking to get the most out of your rehab this spring, I recommend placing an emphasis on ROI (return on investment).

Investopedia defines ROI as “the performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. ROI measures the amount of return on an investment relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment, and the result is expressed as a percentage or a ratio.”

Not all rehabbing projects are created equal. By no means should you ever start a project simply for the sake of doing so; just because you can add another window to a room, doesn’t mean you should. Individual rehabbing projects should never be made for the sake of being made, but rather to increase your return on investment.

Every home improvement project you implement on a rehab is contingent on one thing: your bottom line. As a result, rehabbers are advised to remove any emotional attachment they may have with a property and run the numbers. The numbers on a respective deal, for that matter, will determine which improvements need to be made.

As a rehabber, your priority should be to increase the resale value of a property in the most cost-effective manner. Weigh the cost of a respective project with how much it could potentially return when it comes time to sell.

Let’s take a look at some of the best ROI rehabbing projects investors are going to use this spring:

Spring Rehabbing Projects With Impressive Returns

According to Remodeling’s 2016 Cost Vs. Value Report, the following rehab projects should net you some of the highest return on investment:

1. Deck Addition (Wood)

The temperature is rising, and so too are the desires of people wanting to get outside this spring. Homebuyers are, therefore, more inclined to appreciate any amenities that allow them to take advantage of the outdoors. Fortunately, there is one rehabbing project that can satisfy the needs of said homeowners and your own bottom line: a wooden deck addition. According to the report, adding a wooden deck to your rehab should cost an average of $10,471. However, the resale value of a wooden deck addition is approximately $7,850 and recoups roughly 75 percent of the initial cost.

2. Manufactured Stone Veneer

Manufactured stone veneer has become a simple, cost-effective way to pad your bottom line in more ways than one. On the one hand, adding stone veneer to a rehab project costs an average of $7,519 and coincides with a resale value of somewhere in the neighborhood of $6,988. What’s more, the latest Cost Vs. Value reports suggests that manufactured stone veneer can recoup as much as 92.9 percent of its initial cost. If that wasn’t enough, it has the added benefit of increasing curb appeal, which we all know has the potential to increase the price prospective buyers are willing to pay.

3. Entry Door Replacement (Steel)

I am convinced that no rehab is complete without the addition of a new front door. Not unlike the manufactured stone veneer, a carefully chosen front door replacement has the ability to really make a home stand out. In fact, for the amount it costs to replace a steel front door ($1,335), you can really add a significant amount of curb appeal. Not only that, but a front door replacement has become synonymous with one of the best return on investments in the industry: 91.1 percent. At that price, there is no reason any rehab projects you complete this spring shouldn’t come complete with a stylish new front door that begs prospective buyers to come inside.

4. Attic Insulation (Fiberglass)

A surprise entrant on this year’s report, fiberglass insulation claimed the top spot. No other home improvement project was associated with a higher ROI than lining a home’s attic space with fiberglass insulation. With an average cost of $1,268, fiberglass insulation in the attic has a resale vale of $1,482 and recoups as much as 116.9 percent of the initial cost. The addition of insulation on this year’s list, however, speaks volumes of what homebuyers prioritize: “green” improvements. Subsequently, attic insulation has the added benefit of reducing energy consumption during hot summers and cold winters. Rehabbers, for that matter, would be wise to listen to what their demands are saying. Perhaps attic insulation won’t be the only green home improvement on the list for long.

5. Garage Door Replacement

The garage door can say a lot about a property, and rehabbers are starting to take note, or at least they should be. If for nothing else, a quality garage door is entirely capable of boosting curb appeal almost exponentially. However, it doesn’t hurt that they are also associated with some of the highest ROIs on this year’s Cost Vs. Value Report. Accordingly, it costs an average of $1,652 to replace a garage door, but rehabbers can expect to recoup 91.5 percent of the initial cost and add an additional $1,512 to the resale value of a property.

This spring is guaranteed to be a hot one, and rehabbers should take note of which rehabbing projects will net them the most returns. Which rehabbing projects do you expect to implement on your next investment property?