DTN

So, I decided to buy the house next door to me. The neighbors are moving out, it's larger then my house, and insurance + payments is the same as what I'm paying to rent this house I'm living in now. So the place is run down and needs alot of work. It was built in the 70s but has had some rennovation performed since then.

What sort of things can I do to increase the value and longevity of this investment? My goal is to make money off of this house. I do not plan on living in it, and I will most likely be renting it long after I leave this area. My realtor is also a rental management company.

So far, after conducting an inspection of the place, I've come up with this:

Roof trim requires caluk
shingles on roof are missing
water damage on some trim
sewer vent on roof needs to be redone
branches above roof need to be removed
minor electrical work
minor insulation work
paint needs to be removed from bricks
inside of house needs to be spackled, sanded, and painted.

I've put in a request with the home owner to have these items fixed on top of paying the entire closing cost. I don't know if they will take care of these issues, but that's what I found on my inspection.

What sort of other things should I be looking at to increase the value of a home? I would like it to be in nice condition for renting so that I can get top dollar next year when I move. After really looking at this, it seems kinda like getting a car ready for a car show, but instead of a trophy, it's extra $$$.

What kind of things do people over look on homes which increase their value?

majik

You should determine the demographic that would be looking to purchase this house later down the road. What type of buyer would the neighborhood draw?
For example:

Is it a one story? Older people usually look for a one story house to retire(die) in.
Is it within a mile or two of the elementary, middle, or high schools? If so, it may be good to target a young family demographic.

I would focus on fixing what's broken. When you go through the house, take mental notes of what stands out to you -> what do you HATE, LOVE, or think "why'd they do that?"... chances are, whoever is looking to buy/rent from you will think the same thing. If there's something that turns you off about the house, fix it. These things would make it easier to sell, but not necessarily get any more money for you. Depending on the neighborhood/community/city, some homes could have a fairly strict Dollar per Sq. Ft. ratio. Building onto the house could increase the sq. ft. and improve the value.

If it has a nice backyard that could be a focal point of selling, make it attractive. Find the easiest places to improve. Build a nice deck or enclosed/screened-in patio. If it has an unfinished basement, you might be able to turn it into usable space yourself and really save on the costs. Anything you can do yourself to improve the value should yield the highest ROI.


Since it's an older home, ~40 years, I'd focus on Curb appeal. Make people want to stop in and see it - just clean up the exterior (paint, appealing landscaping, etc.) and make it look clean. Determine if you'd like to keep the 40 year old look, or find a way to modernize it. If all the homes have a 40 year old look, find out what could make yours stick out and look better.

I'm sure there are thousands of articles out there with "experts" telling you what cheap things will help you get more money. Skim through those articles and find tasks you think are easiest for you to tackle on your own. Focus on your wiring expertise - install surround sound in the walls or LED lighting accents in some rooms. Find ways to put neat/attractive lighting ambiance in the bathroom for a female.


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did you do the inspection yourself, or have a professional do it? Definitely get a pro... they know how to inspect the roof, foundation for cracks, leaks, etc. My mom's a realtor, and a home inspection is the biggest necessity ever.

DTN

My inspector was not a "Pro" he used to be a pro, but not licensed anymore. He went into detail. I only listed some of the main things. I made a checklist of things to do to the house.

I really appreciate the ideas majik. If anyone else has anything to say, please do. I've got about a year to get this thing ready to be rented out.

What you mentioned, is exatlly the kind of things I want to hear, I really don't know anything about improving the value of a home.

Stocker

perhaps start by searching on "improving value of a home" ?

UrS0NvS

in a way, buying of a used house in one aspect is like buying a used car. looking at things on the outside like some of those you have mentioned are ways to improve the house but i want to know when i buy a house that it doesn't waste my money by leaking like a hose. see if you can get a air flow test done on the house. that will tell you if you have any areas (especially around windows and doors) that need fixed now compared to surface things that can be fixed later.

hate for you to buy a house then later find out you have to spend 5k on new windows and doors cause they leak like a whore.

DTN

Well, I got on the roof, in the attic, and saw into the walls as well, pulled off a few light switches and the main breaker to check for grounding and checked out under the cabinets as well.

The previous owner really only changed out the windows with 3 pane storm windows. So the windows are new but the rest of the house needs work. What really gets me is that they did all of that but missed obvious stuff like caulking around places where they drilled in cable access from the outside of the house. Quite a few things are jimmy rigged like the wiring on the outside of the house which extends down into the flower bed where a splitter then breaks it off. lol

I don't see anything majorly wrong with the place, but it really needs TLC and a owner who actually knows something about doing it right, or will research it at least.

majik

OOHHH......

ANYTHING you put into the house, keep receipts!!! Especially stuff like windows, adding insulation, A/C units, any "energy efficiency" improvements because they are tax deductible.

radu_rd2

You might also want to find out how well being a landlord in that area would work out. In some areas the laws make it very hard to do anything about a renter that comes in and destroys the house (for example) and it's not worth it to rent out a place you put a lot of $$ into.

majik

I have a mortgage template available to download here: http://www.rdtiburon.com/index.php?showtopic=27417

Plug in your price, different percentage rates, and it will help determine your mortgage payment. A friend of mine just got approved for 4.5% financing on an FHA loan over 30 years.

DTN

Thanks magic! My rate was already fixed at 4.6 I could have done better if I had waited for a few days or left it flexible. Oh well.