Adding Value on a Budget
Don’t overlook the smaller, lower-cost items that can add interest and value to your renovation.
The purpose of all home renovations is to add value to a property—while adhering to some form of a budget. That’s even more true with investment related to renovations. Adding value within a budget plays a large role in the success of the venture.
When planning a renovation of an investment property, many investors focus solely on the big-ticket items as they try to add value or cut costs. Although it’s true that cabinetry, windows, doors and so on all have an immense impact on the budget and marketability of a home, the ability to add value and savings does not have to stop with those items.
Smaller details can add up and generate significant buyer attention as well as reduce costs in some instances.
When planning your project, some basic considerations that can help you achieve both value and savings are knowing your materials, being open to change and thinking outside of the (BIG) box.
Know Your Materials
Most individuals in this industry already have a good understanding of construction materials and basic costs. Still, it is good practice to occasionally wander the aisles at the home improvement stores or scroll through some websites to see if there are any opportunities to increase quality while reducing costs.
For example, in one instance, a trip to a home improvement store led to the rediscovery of faux-decora outlet wall plates. Now, for someone in new construction, they wouldn’t serve much of a purpose. For low-budget rehabs, however, they are perfect!
They are essentially a full cover that completely hide the existing outlet, and they have holes for the plug prongs to pass through the plate into the existing outlet. The cover is designed to look identical to a standard decora outlet/plate. These plates cost about $2.25 each, which is 20% less than a basic decora outlet and wall plate combo. But the real savings comes with not having to pay for labor to replace the outlets. Most rehabs will be repainted, so simply having your painter reinstall these wall plates instead of the old ones reduces your labor cost on the outlets to zero.
Being Open to Change
Being open to change refers to the idea that every rehab does not have to have gray walls with white cabinets and white subway tile. If the demographic allows, adding a few low-budget, but interesting, design points can make your house stand out from the rest. You’ll have minimal added investment, and in some cases, actually reduce costs.
A good example that supports this idea is an alternative to traditional door and window casing. Instead of using a standard 2 ¼” colonial casing, consider using 3 ½” radius edge MDF. It has a simple craftsman design but makes the trim stand out more than the colonial (especially in listing photos). It is wider than a standard casing, which hides any caulk lines from old trim that has been removed. And, it’s cheaper! The MDF can be had for about $0.63 a linear foot; the colonial casing runs $0.80 a linear foot (as priced using nondiscounted pricing from a big box website). In this case, that’s a 21% material cost reduction.
Thinking Outside the Big Box
Big box stores are great for convenience. You can get most of your material under one roof, and there is at least one in virtually every town. Sometimes, though, just because you can get it at a big box store does not mean you have to.
Take vanity mirrors for example. An in-stock framed mirror at the big box store will cost $50 or more and is as basic as basic can get. It may take a few extra minutes out of your day, but your local home goods store will provide an entire aisle of trendy mirrors in various sizes that will single-handedly upgrade the bathroom from generic to fashionable. These mirrors start at $29, or about 40% less than the big box mirror. Again, small savings add up, and you are getting a superior finished product. Ultimately, making one minor change will not have much impact on the overall results of your project. Collectively, though, several minor changes add interest and reduce costs. And they may add just enough value to persuade buyers to choose your house over another or keep the project from going over budget.
