House flipping is a big and potentially highly profitable business. More than 207,000 homes were flipped in 2017, according to a report from Attom Data Solutions.
But to really make an art — and a business — out of flipping houses, you need to polish a rough stone into a shiny diamond. You can earn hundreds of thousands of dollars, even millions, but you need to know your stuff. And one of the first things to understand is the best home improvements that yield a high return on investment.
Here are 2 rules to follow to get the most return on a housing investment, as well as the 3 top home improvement projects for delivering ROI.
Rule #1: Choose the Right House
The first thing you need to do is to find a house worth flipping. It needs to be structurally sound and require only cosmetic changes. Otherwise, you’ll be up to your neck in a money pit of debt. Without enough structure and foundation to support it, the project will crumble, no matter your vision.
Rule #2: Impress the Neighbors
On average, work done to the exterior of the house will yield higher returns than the interior. It’s all about curb appeal — impressing the neighbors. In fact, the 3 projects for the highest year-over-year increase by the REMODELING magazine’s 2018 Cost vs. Value Report can each be seen from the street. If you want resale value, make an impression, realtors recommend.
Project #1: Installing a New Street Facing Garage Door
There’s no doubt about it — a new garage door is hands down the best investment you can make on your home. In fact, a new street facing garage door delivers 98.3% ROI, according to the Remodeling Magazine Cost vs Value Report. And that’s on average. In a heated realty market like Rancho Cordova, California, you could well be making a substantial profit on your garage door investment.
Project #2: Manufactured Stone Veneer
This comes in at a close second with a 97% ROI. Rip out the existing vinyl siding from the entry point of a street facing entryway. Replace it with manufactured stone veneer. You’ll need two separate layers of water-resistant barrier laid over bare sheathing, corrosion-resistant lath and fasteners, and nominal ½-inch-thick mortar scratch coat and setting bed. This project isn’t for the faint of heart, but delivers plenty of value if you do it right.
Project #3: Install a New Entryway
Replacing a new entryway with a quality 20-gauge steel door delivers 93.1% ROI. Use a factory finished door. You can always keep the same locks to save money and hassle.