The concept of real estate investing is relatively simple. Investors acquire an asset for a reasonable price, make the necessary improvements (if any are even required), and sell it for more than was originally invested. Sounds simple enough, right? However, the devil is in the execution. There are seemingly endless possibilities in which a successful rehab may be carried out.
Essentially, a home is a blank canvas that investors can do whatever they want with. They can add or remove as many features as they like. Of course, some upgrades are more profitable than others, but what works in one area may not work at all in another. What homeowners are looking for in San Diego may be entirely different than in a place like Colorado Springs. In fact, investors can argue until they are blue in the face as to which upgrades matter the most. In reality, there is only one constant that every investor can agree with: return on investment (ROI).
Every upgrade made to a property can be associated with a cost. After all, nothing is free. You will have to put money into a home to get money out of it. However, some upgrades provide you with a greater return when it comes time to sell the property. As an investor, your goal is to maximize the return on a property. Therefore, your goal is to incorporate financially savvy home improvements that net the largest ROI. The following illustrates cost-effective improvements that can significantly increase your bottom line. More bang for your buck – if you will.