The best way to turn a fix and flip profit is to choose renovation projects with high ROI. However, if you invest your money in the wrong projects, it can increase your costs and reduce your profit potential. To help, we spoke with industry experts and identified the 25 best fix and flip projects with high ROI potential.
The following are the 25 fix and flip projects with high ROI:
1. Maintain the Landscape
Tarek El Moussa, “Flip Or Flop” HGTV Host and Real Estate Expert, Tarek & Associates
Curb appeal is one of the most important features you need to enhance during fix and flip projects. The landscape is one of the first things that potential buyers will see. Landscape maintenance is budget-friendly and it can increase your property’s value and ROI potential. Ensure that the grass is clean and well-maintained and planted beds look fresh with mulch and low-maintenance flowers.
2. Refresh Both Interior & Exterior Paint
Kuba Fietkiewicz, Founder, REIkit.com
In general, paint needs to be refreshed for both the outside to improve your curb appeal and inside to freshen any dated and dull-looking walls. Repainting is one of the highest ROI improvements you can do for a fix and flip project since it doesn’t add too much to your total cost. It’s best to choose a fresh and neutral color that looks appealing to most homebuyers.
3. Update the Kitchen
Frank Sanchez, Principal & Co-Founder, SDF Capital
Renovated kitchens will always get you get the best return on investment for a fix and flip. Some of the important updates that will help maximize your ROI include the installation of quartz or granite countertops, high-end stainless steel appliances, and functional cabinets. Also, making sure that the kitchen is spacious is an important factor that will appeal to homebuyers.
4. Use Vinyl Composition Tile Plank Flooring
Brady Hanna, Real Estate Investor, Mill Creek Home Buyers
Vinyl Composition Tile (VCT) plank flooring is extremely popular among experienced fix and flippers since it is affordable and looks great in kitchens and dining rooms. Using hardwood floorings for a fix and flip can be very costly and may not be practical. However, modern vinyl floors can mirror almost any style of flooring including wood, tile, and natural stone at a lesser cost, increasing your potential revenue.
5. Update the Lighting Fixtures
Dustin Heiner, Real Estate Investor & Founder, Master Passive Income
Your home’s lighting is a big factor that can make or break a sale. Buyers prefer to live in a house that feels welcoming and bright, so updating the lighting fixtures in your fix and flip project will go a long way to making the home appealing to potential buyers. The lighting doesn’t have to be high-end – you can choose modern and classy lighting fixtures that are not too expensive, adding to your bottom line.
6. Choose Larger Floor Tiles
Matt Karlin, 3rd Generation Owner, Nemo Tile
When it comes to flooring, choosing oversized tiles are cost-effective because bigger tiles cover a larger area. Further, bigger tiles also help make a small room look larger and spacious. Avoid designs that look too printed and colorful to ensure a clean yet modern look. After all, tiles with cleaner designs are more appealing to most potential buyers and can add a lot of value to your flip.
7. Repaint or Install a New Front Door
Brian Davis, Co-founder & Lead Real Estate Writer, SparkRental
Whether you’re installing a new steel door or simply adding a fresh coat of paint or wood lacquer to the existing front door, it will be a plus factor to your potential buyers’ first impression. Also, installing a door knocker that’s relevant to the local culture will act as an added piece of charm. This should positively increase your revenue.
8. Add a Bathroom
Michael Kelczewski, Realtor, Brandywine Fine Properties Sotheby’s International Realty
An additional bathroom will add value to your fix and flip project and increase your ROI because most residential appraisals value properties using the sales approach, accounting for the number of bathrooms and bedrooms in a house. If the property is a two-story house, make sure that you have bathrooms on both the first and second floors. Also, having a bathroom inside the master’s bedroom is preferred. All of this will increase your sale price and ROI.
9. Choose Projects with Low Ongoing Maintenance
Spencer Chambers, CEO & Real Estate Expert, The Chambers Organization
Choosing a project that is low upkeep is more valuable and appeals to more potential buyers. For example, your landscape should be low-maintenance because most homebuyers don’t want to spend too much time maintaining their landscape. To do this, you can invest in a sprinkler system to help maintain the landscape with less hassle for the homeowners. These little features can be huge time savers that buyers are willing to pay extra for.
Installing efficient windows will not only increase your ROI, but it can help potential homeowners with more energy savings. Zillow recommends replacing single-pane windows with the more energy efficient double-pane windows. This can bring around a 115% return on your investment.
Updating bathrooms can add more value to a home. However, Invest Four More recommends not to overspend on them and to consider the neighborhood. For example, if you spend $20,000 on a bath in a $200,000 house in a rundown neighborhood, it would be difficult to get that money back. You can remodel bathrooms for less than $3,000 and receive a positive return.
According to Bankrate, adding fiberglass attic insulation can help increase your property’s value. Plus, it can also help the new homeowners save on energy costs. This environment-friendly project is a great addition to your property if you want to attract homebuyers and increase your potential returns. Most homebuyers will pay extra for this investment, especially if they clearly understand its benefits.
Replace the old, stained, dirty, and worn-out carpet with a new one. This is a quick and easy way to increase the value of your flip. Trulia recommends choosing a neutral shade of carpet that matches the color and style of your house. Only install a carpet where it’s appropriate, and seek professional help, especially if you don’t know how to do it yourself.
Upgrading to high-efficiency appliances, water heaters, and furnaces can increase your property’s value. They make your home more attractive ,and they can reduce living costs for the homeowner. As mentioned by US News, some states and cities may also have tax incentives or other programs to help offset the cost.
A patio or deck gives homeowners much needed outdoor space that they can use during spring and summer. Adding a patio or deck in your house’s backyard will increase your property’s value and attract more potential homebuyers. According to House Logic, you can roughly get 102% to 106% return on a patio or deck.
When selecting appliances, it’s best to choose inexpensive brands that are functional. Fox News also recommends choosing standard colors and styles that would appeal to most buyers. For example, choosing stainless steel or black appliances is better than choosing bright and colorful items like blue or yellow.
A garage door replacement can help boost the curb appeal of your property, increasing its value. For some properties, replacing the garage door is necessary because it gets worn easily. According to The Street, during cold weather, water, snow, and other things bouncing up from the driveway can rot the garage door. This makes replacing and upgrading it to better quality material a wise investment.
If you’re fix and flipping in warmer areas, Inman suggests adding an outdoor kitchen in the backyard. Outdoor kitchens are becoming very popular, and adding one to your property can increase your average ROI between 100% to 200%. It’s recommended that you use durable materials and keep the style of the outdoor kitchen simple and neutral.
Fireplaces help keep your home comfortable and warm, and they are positive aesthetic elements, too. According to Realty Biz News, fireplaces are an easy way to keep the homeowners warm during the winter without the need to turn up the thermostat. Because of this, fireplaces make your home more valuable and appealing to potential buyers, increasing your potential ROI.
Adding more space to your property is a great fix and flip project with high ROI. Bay Management Group suggests adding a bedroom, sunroom, basement, attic, or just opening up an existing room by removing a wall to make your house look more spacious. Additional square footage can increase your potential ROI because properties are typically valued per square foot.
According to iHouse Web, most new homebuyers want ample storage. Creating additional storage for your fix and flip property will increase its value and attract more buyers. You can put in additional closets, cabinets, or hire an interior designer to identify other ways to add storage.
For fix and flip projects with high ROI, HGTV recommends using vinyl siding or upscale, fiber cement siding to improve the exterior of your house and improve the value of your fix and flip. As this exterior improvement is inexpensive, it can help increase your potential ROI while bringing down the cost.
24. Add a Carport Instead of a Garage
Evan Tarver, Finance Editor, Fit Small Business
If the property doesn’t have a garage or if you’re looking for a quick way to increase the aesthetics of your home, a carport is an inexpensive and functional way to do so. In many places, carports are actually on-trend and in demand, such as in Austin, Texas.
25. Repair What’s Necessary
For fix and flip projects with high ROI, it’s important to prioritize the things that need immediate repair rather than focus on redesigning the house. Spend most of your budget repairing what’s necessary and less on non-essential enhancements. The lower the amount of your total cost, the higher potential revenue you can earn from your flip.
Bottom Line – Fix and Flip Projects with High ROI
The point of doing fix and flips is to earn a profit and there are specific fix and flip projects that can increase your ROI. However, there are also projects that just increase your cost but don’t actually add value to your property. Refer to our expert tips above to ensure that you’re choosing the right projects and maximizing your fix and flip return.