Flipping houses is a rewarding real estate investment and the best way to make it profitable is to choose renovation projects with a high return on investment (ROI). Investing in the wrong projects can increase your costs and reduce your profit potential. To help, we spoke with industry experts who shared the best fix-and-flip projects.
Here are the top 25 fix-and-flip projects with high ROI potential.
1. Replace Your Siding
Kuba Fietkiewicz, Founder, REIkit.com House Flipping Software
Faded, dented, or chipped siding is an immediate turn-off for a potential buyer who will also wonder what other maintenance has been deferred. Compared to other projects like new roofing and new windows with slightly lower returns on each dollar spent, you are likely to recoup the majority of your flip costs for siding replacement. That makes it well worth adding to your rehab budget. To boost even higher returns, choose a color in line with those of neighboring houses that also match the style of the property; neutrals and light gray tones continue to appeal to the largest number of buyers.
2. Update the Garage Door & Front Door
Robert Taylor, Owner, The Real Estate Solutions Guy
Everyone knows that curb appeal is important as it’s the first thing your buyers see when they drive up to your house. Replacing the garage door and front door, are relatively cheap projects, yet can give buyers that “ahh” feeling. Both of these projects will likely give you more than a 90% dollar for dollar return. However, their combined impact on your curb appeal is immeasurable.
3. Target 2- to 4-door Multifamily Properties
Derik Keith, Owner, Metro Cash Offer
Single or small multi-family units 2-4 doors bring the highest ROI. Look for the rougher looking home in an otherwise nice neighborhood where most of the homes have already been updated and remodeled, reflect high pride of ownership, and are located in an area that is a short commute to places of interest. Prioritize renovations in areas where most of your time is spent in a dwelling, like the main living, dining, bathroom, and kitchen areas.
4. Improve Your Home’s Curb Appeal
Serena Miller, Marketing Manager, Pro.com
First impressions count so don’t underestimate the value of your home’s curb appeal. For a quick fix, consider pressure-washing your siding, repainting your trim, or sprucing up your landscaping with lush greens and flowerbeds. This can make a big difference both in your listing photos and in-person visits.
5. Give Your Property a New Look With Laminate Wood Flooring
Earl White, Co-founder, House Heroes
Laying down a shiny new wood floor across easily pays for itself several times over. In most cases, carpets need to go. Traditional wood floors can be quite pricey ― but there are good alternatives that look just as good. Home renovators can buy engineered or laminate wood for a fraction of the cost of an expensive floor.
6. Update Bathroom Vanities & All Fixtures
Uriah Dortch, Owner, The Inspiring Investment
Bathrooms are always going to be one of the best fix-and-flip projects that can bring high ROI, but sometimes those aren’t able to be completely redone. You may swap out bathroom vanities and all fixtures if the budget allowed. It gives the home an updated look, but the cost is less than ripping everything out and starting from scratch.
7. Focus on the Exterior of the Home
Tonya Bruin, CEO, To Do-Done Renovations
Many people don’t realize that making updates to the exterior of the home can also bring in a very substantial return on investment. For instance, boosting the curb appeal can make your home more attractive on the market. Installing quality exterior doors can have up to 100% return on investment. Steel and fiberglass have the best bang for your buck, while traditional wood doors don’t have the same kind of ROI. Additions like patio stones and custom decks can have an ROI anywhere between 60% to 75%. If you are located in a warmer climate where outdoor living spaces can be used year round, an outdoor kitchen can bring in a whopping 100% to 200% ROI.
8. Find a Home With a Layout That Doesn’t Have to Be Reconfigured
Jonathan Faccone, Founder, Halo Homebuyers LLC
The best flip projects resulting in the best returns occur when you can find a home that fits several key parameters and can buy it at the right price. You make money on the buy, not the sell. Consider buying in middle-class neighborhoods with good lot location and a desirable home layout. The home should be an open concept – 3-bedroom, 2-bathroom, with already a good amount of functional space. The overall layout does not have to be reconfigured, which constitutes significant savings to the flipper. However, do not to be cheap on the renovation as it’s important to deliver a quality product. While you have to preserve the profit margin by keeping budget costs low, you also need to focus on providing a great product so you can sell faster at top market value.
9. Add a New Deck
Cristina Miguelez, Content Manager, Fixr.com
There are many projects that you can undertake with a high ROI that aren’t necessarily all that major or invasive. For example, a good project is a new deck, which can bring an ROI of up to 82%. This is especially applicable for warmer areas. Make sure to use the highest quality materials you can afford on your budget and don’t cut corners. These things have a way of making themselves known during inspections, so even when something looks nice on the surface, if it’s done badly, it will come out in the end.
10. Increase Living Space
Bruce Ailion, Realtor & Attorney, The Ailion Team
One of the most profitable fix-and-flip projects is adding space in your home. It can be adding a master bedroom or an existing floor plan at the same level. You may also convert a back-to-back half bath and closet into a full bath and half-closet. This will add more value to the cost of the bath. Taking inside storage for a more productive space will increase value. This may mean converting a garage to living space and building an additional garage will add value in most instances.
11. Prioritize Issues Like Termites, Mold, & Foundation
Melissa Breyer, Owner, Atlanta Real Estate Attorneys
When renovating a house that has major issues like termites, mold, or foundation issues invest money into working with a specialist dealing with the issue at hand and a good real estate attorney. The specialist will verify that you have remedied the problem to the best of your ability and the real estate lawyer will make sure that you have the proper verbiage in your contract disclosures to keep you from being sued. The money will be well spent to avoid lawsuits from buyers who discover more structural damage, costing them thousands of dollars in repairs or mold that is causing health issues for their family. Spend the money to protect yourself.
12. Choose Properties in Major Metropolitan Areas
Chris Waits, Acquisition Manager, We Buy Ft Worth
Right now the hot spots that investors are seeing a high ROI happens to be in completely renovating and remodeling properties within proximity or walking distance to downtown in major metropolitan cities. Three areas that investors should focus on when remodeling to get the highest ROI is the kitchen, bathroom and bedroom areas of the property, and it wouldn’t hurt to have some nice landscaping done for curb appeal also. Cosmetic updating is also important from the type of flooring that will be used to the color of the paint that will be used.
13. Repaint Your Interior
Ralph DiBugnara, President, Home Qualified
Fortunately for investors, many rehab fixes and aesthetic refreshers can be done cheaply. Many improvements can be done without the intervention of a contractor. Consider a fresh coat of paint to enhance the general appearance of your property. Choose a neutral color as this is often the safest option to target potential buyers of different personalities.
14. Invest in the Safety of the Property
Shawn Breyer, Owner, Breyer Home Buyers
Investing in safety for the property that you are flipping will not have a direct ROI, but it will keep you from losing money. Imagine there’s a retaining wall in the neighbor’s yard that drops 10 feet down from your yard, but you don’t want to put up a fence to keep people from falling. How many home buyers are going to pass up on the property because they feel like the yard is too much of a hazard, reducing the number of people that submit offers on your property, which reduces demand and the amount of profit that you are going to make on the flip? Keep safety in mind and spend a reasonable amount to make your properties safer for home buyers.
15. Choose White Paint to Add a Sense of Space
Laura Muller, Interior Designer, CEO, & Owner, Four Point Design Build Inc.
Add a fresh coat of white paint throughout the interior of the property. White is always an ideal color for a clean, fresh, modern, new canvas. It’s easy for the new homeowner to visualize and grasp space. It is flexible enough for a wide audience, and it also photographs beautifully, so it can help you stage and market your property.
16. Maintain the Landscape
Tarek El Moussa, ‘Flip or Flop’ HGTV Host & 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.
17. 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 fixtures that are not too expensive, adding to your bottom line.
18. 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.
19. 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.
20. Opt for Larger Floor Tiles
Matt Karlin, Third 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.
21. Update the Kitchen
Frank Sanchez, Principal & Co-founder, SDF Capital
Renovated kitchens will always get you 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.
22. Add a Carport Instead of a Garage
Evan Tarver, Finance Editor, FitSmallBusiness
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 on-trend and in demand, such as in Austin, Texas.
You can add more square footage to your property by finishing the attic and/or basement. According to Realty Biz News, finishing an attic or basement offers the best return on investment. As most homes are priced by the square foot, this means you can earn more thousands of dollars extra revenue when you sell your property.
House Logic suggests installing better insulation, especially if your flipping in areas where it gets super cold during the winter. Adding insulation can help increase your property’s value. This can cost around $2,100, and you can expect a return of approximately 76%, on top of the added savings on heating and cooling.
Instead of replacing the cabinets in your kitchen and bathroom completely, iHouseWeb recommends refacing them as a less expensive option. You can replace cabinet doors and hardware, attach thin veneers to the surfaces of the cabinets, or repaint them if they were originally painted.
The Bottom Line
There are specific fix-and-flip projects and strategies that can help increase your ROI. When choosing a renovation project, make sure it can add value to your property so that you’re not just spending for additional costs in vain. Check the expert tips above to ensure that you’re choosing the right projects and maximizing your fix-and-flip return.