When taking on a gut rehab project, the costs can add up quickly. By the end of the project, thousands will have been spent on bathrooms, kitchens, and living spaces. While gut rehabs typically cost hundreds of thousands of dollars, it is still important to be budget-conscious in a number of areas. I’ve compiled a list of suggestions where I think people should invest their money and where they shouldn’t. Enjoy!
Invest in this: Fireplace
Warmth, style, and charm – who doesn’t want a fireplace? Assuming you have a chimney in place, a nice fireplace goes a long way. In fact, according to a San Francisco Gate article, in some parts of the country, a fireplace can increase the value of your home by $12,000. Of course, make sure you are surpassing all code requirements if you have a wood-burning fireplace.
Not on that: Fireplace:
You may be thinking I’ve either screwed up this blog or gone crazy. Well, what else is new? Here’s the deal: if your house doesn’t currently have a chimney, then it’s probably not worth adding.
Invest in this: Skylights
Chicago is a dark place during the winter – even with overcast skies, natural light still transforms living spaces. Nothing compares to natural light. The upkeep is relatively minimal and you don’t have to go through the hassle of changing light bulbs every couple of months.
Not on that: Garages
Look, garages serve one purpose: to put a roof over stuff. That’s it. Unless there is something impeding that purpose, there is no ROI on fancy garages. If you’re putting a new roof on your house, then go ahead and put one on your garage. That’s basically all it’s worth. Particularly in Chicago, owners want garages to put their cars in so they can come home and not scour the city streets for a parking spot – as long as the garage is serving that purpose, then it’s perfect.
Invest in this: Outdoor Space
I would highly recommend trying to avoid grass as much as possible when it comes to your yard. Now this doesn’t mean you need an astroturf lawn like The Brady Bunch – instead look to gravel or plants that don’t require a ton of water. These are substantially cheaper options to maintaining St. Augustine grass throughout the year. Also, people love to be outside – a small deck, patio, or pergola goes a long way. It doesn’t have to be fancy, just functional and cute.
Not on that: Major Electrical Appliances
Electric is expensive. Renters don’t like to pay a lot for electric. Buyers don’t like to pay a lot for electric. Particularly if you are flipping, not having gas appliances can be as much of a deal breaker as not having outdoor space if your buyers have competitors to choose from.
Bonus! Invest in This: Sustainable Appliances
Okay, full disclosure – many major “green” installations have an upfront cost, however they pay off in the long run. Gut rehabs are a major investment and sustainability is something you can sell for a premium. For example, while solar panels can cost a few thousand dollars, buyers are then eligible for a green tax credit and, after the first couple of years, the panels will have paid for themselves through the energy cost savings.
By following these tips, you should be able to look into the possibilities of saving both short term and long term costs. If you would like to learn more, or speak with me about a potential gut rehabilitations project, then contact us at firstname.lastname@example.org.