We have a low tech remodel company. Nothing is fancy, everything is functional. It hasn’t done too much in the past three years, but we still prepare properties for sale. In the past we did kitchens, bathrooms, and basements. I have a $10K rule that if you are spending more than that you’re wasting money. You’d be surprised what you can get done.
Yesterday I was in a home that is the middle of a $120K remodel. It’s beautiful. They did everything. What I have been wondering is if there will ever be a return on this obvious investment.
This isn’t the first time in the past two years that I’ve wondered about remodels that made sense five years ago. In the past there was a set of rules about if you invested in a bathroom you could expect a return. Now I look at adding a bath room may get a return, but pretty much maintaining what you’ve got makes more sense. Maybe a new tub surround, or vanity, but gutting a place doesn’t seem to pencil.
The same with the kitchen. No one is going to pay for some one else’s vision of a gourmet kitchen. You can do it for yourself, and that is getting to be more popular, but you have to figure it’s a loss.
Even flippers are starting to cut corners on what they spend, except on system upgrades. Plumbing, and electrical are pretty safe bets for resale. It’s not so much profitable, but buyers are getting pretty savvy about big ticket expenses.