I am living in my "flip", that was 1999 when i bought my 4 th flip.........market went south here in '99. had to sell my home and move to the flip.........8 years later and 80K in improvements my $145K flip is now worth $340K...moral of story is: 1. don't buy 2 Bedroom homes.........2. don't over improve for market area........3. 60 day max for the Flip..........and have a plan for a slow sale, remember the 2 year "live in" IRS regualtion for tax free sale.
My flip in '99 has become my permanent home and just bought a foreclosure 2 doors from me. Paid 235K and have spent 27K so far (30 days) hope to sell for 295K, that is 10% below market value. My formula is always sell for below market to assure Quick sale.
While I'm no expert in this I have seen some examples from my own neighborhood and also when I was looking to buy a house. I think you definately don't want to improve a house to the point it's over-priced for the area. I've seen this happen in my own neighborhood. Someone would buy a house and live in it for a short time while doing a bunch of big improvements then turn around and try to sell it for much more than they bought it just less than 2 years ago and more than what anyone on the block recently paid for theirs.
Smart home buyers look at recent sales of comparable properties in the neighborhood. This is what I did when I was house shopping and after researching a house I was bidding on I did not cave in on what I thought it was worth. They bought the house for $76,000 just 2 years before putting it back up for sale at $123,000 in a moderate income neighborhood and that's coming down from the $128,000 in they had originally priced it before it sat vacant too long. Turns out the owners were "flippers" and my agent found out they got some of the remodel work done at low costs that she has never run into before and she and her son flip houses on the side that she compared it with.
I'd probably echo the same thoughts everyone else has here. Do the work yourself if you can and don't go overboard to the point that it becomes over-priced for the neighborhood. I think finished or partially finished basements add a lot of value if you find a house that makes sense to do it. I know that was a big selling point when I was looking for a house as some of the basements can nearly double the total floor space you occupy.
I would think anything to make the house more energy efficient would be money well spent. Otherwise I think someone pointed out the bathroom and Kitchen are the best returns on money spent. Tile floors are another easy way to up the price. As far as the market and such is concerned, keep the house and rent it to college kids. Good luck.
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