Real Estate Blog

In talking about green improvements, the subject of rehabbing a property in general came up. The question was basically, "What really adds value and attracts buyers and what's just a waste of time and money?"

Well, first, let's be honest. When it comes time to sell a property, what you've put into it is not going to come back to you as a 1 to 1 ratio. In other words, $20,000 in improvements does not mean $20,000 more at closing.

The ratio goes up and down with the market. In 2007, you could expect to pick up about 70 cents for every dollar you spent on improvements. In 2008, that was down to 67.3 cents. Location is also a factor. If you're out in San Francisco and stick a deck on a property, which is the improvement of choice for that locale, you're likely to recoup 100 percent of the work at sale (and you'll certainly attract more renters.)

Given all that, I can say that I think kitchen renovations are always winners. Something as simple as a coat of fresh paint, some new cabinets, and a new floor will go a long way. Be careful with the granite counters and the stainless steel appliances, though. You want to stay with the overall "tone" of the house. There's a song lyric I really like. The guy is lamenting the fact that he brings home a "Walmart check in a Gucci hood." Consistency makes for greater appeal throughout the home.

After kitchens, I'd say revamp the baths. People get really hung up on bathrooms and do not, under any circumstances, want to feel like they're living with somebody else's dirt. If you don't have money to spend anywhere else, redo the baths. This is one room of a house for rent or sale that should sparkle. (At sale time, bath upgrades can easily bring back 75 percent of their cost in sales price realized.)

If you have a property you're really taking down to the studs and you get the idea to add a room, stop and think -- a couple of times. A third bedroom you can only get to by walking through the water heater closet is not a good idea in anyone's imagination. Preserving the logical flow of the floor plan and avoiding awkward add-ons is imperative.

If you have rehabbing experiences or stories you'd like to share, we'd all love to hear them. Ditto for questions. One of the best ways to find out the upgrades with the highest value for your market is just talking to other people who do what you do. We all have a lot to learn from one another.