The Best Fixer-Upper--Part IV: Most Profitable Repairs

As a long-time real estate investor, I've re-done several, well-located fixer-uppers. I buy only solid homes located in good, middle class neighborhoods. The most profitable have only needed cosmetic repairs to put them in show home condition. I won't spend $1.00 on a repair that will not raise the market value by $2.00. I never buy homes with serious structural defects. To date, I have always made money.

The Most Profitable Repairs Are:

1. 1. Paint: Paint is a seller's best friend. A fresh coat of paint inside and out can change the entire look and feel of a home. Paint is inexpensive and can be done by the homeowner. Paint adds thousands of dollars to a homes market value, for minimal investment.
2. Landscape: Neglected landscape is easily corrected. When done properly, it can invite people in, beautify, hide unattractive features, add color, add light to the interior and give life to the neglected home. Cut back overgrowth, replace dead shrubs, add a speciman tree, color and get the lawn in shape. Landscaping increases resale value by thousands of dollars and can easily be done by the homeowner.
3. Light Fixtures: Replacing shoddy, outdated lighting fixtures is a quick cosmetic fix that adds light, character and updates the overall appearance of a home. Large home improvement retailers, such as Lowes and Home Depot, make changing fixtures inexpensive and fun to do. If the wiring is in good working order, this is another task the homeowner can do in a few hours. When deciding what lights take priority, the front door and entryway always has the biggest impact on buyers. Don't forget to inspect the switch and electrical plates, if they are old, dirty and yellow, replace them for a few bucks.
4. Flooring: Worn, soiled carpet is a turnoff to everyone. Take it out. If you find hardwood floors underneath, uncover them and refinish area's that need it. If you don't, recarpet the entire house in a nice, light neutral color. If the budget did not include new carpet, clean it the best you can. If the carpet color is a turn off, paint the walls a lighter shade of the carpet to detract attention. Ripped, dirty vinyl floors are generally inexpensive to replace. Some of the new flooring products are also designed for DIY installation to save even more. To get the highest resale value it is usually a good idea to refloor, if needed.
5. Cabinets: Kitchens and Baths sell houses. If new cabinets are not an option, try a fresh coat of semi-gloss paint and new knobs. Another cost cutter is to replace the doors and drawer faces only, if the cabinet frames are solid. Taking a section of upper cabinet doors to a glass company and adding glass inserts in them is also a good, update solution. In the bathroom, replace, paint or remove the old vanity and add a new one or a pedestal sink.
6. Doors: The entry door needs to be nice and invite buyers into the home. Restain or paint, add a kick plate and new hardware. A little money in the entry of the home goes a long way, when it comes time to sell. If the interior doors are dated or in bad shape, replace all the doors. The frames are in so you only need to buy the slabs. The new doors come in many styles to compliment the house and many are already pre-painted.
7. Plumbing Fixtures: Old toilets cost about $350 to replace. Old tubs can cost anywhere from $350 to thousands of dollars. Sinks run from $200 up. If stains or chips are a problem, don't replace, reglaze. Check your phone book for resurfacing companies and get a quote.
8. Appliances: Why replace appliances that work? If you have to replace appliances, look for scratch and dent companies. Consider lightly used or refurbished appliances before buying new. Often, only a good cleaning, new burners and drip pans are the fix.

Cosmetic fixes and updates are crucial to an increase in market value. Items like new roofs, heat and air units, water damage, foundation problems, room additions, new windows, repaving, adding decks are major rehabiliatation. These type of fix ups should be avoided because the upgrade will not add more market value than they cost. Fixers need to avoid these types of unprofitable rehabilitations like the flu. If not, it will be your bank account that needs a shot in the arm.