Home Renovation & Investor Issue
If you had $15,000 for a home remodeling project, what would you do with it? Realtors always say “kitchens and bathrooms sell homes.” But so do updated mechanicals like the furnace and A/C, along with windows/siding/doors. Though they are not so sexy renovations, they do have a good return on your money.
According to FortuneBuilders, the top 10 Return on Investment Projects are:
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Minor Bathroom Remodel: Returns an average of 102%
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Landscaping: Returns an average of 100%
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Minor Kitchen Remodel: Returns an average of 98.5%
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Attic Bedroom Conversion: Returns an average of 93.5%
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Major Bathroom Remodel: Returns an average of 93.2%
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Major Kitchen Remodel: Returns an average of 91%
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Entry Door Replacement: Returns an average of 90.7%
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Deck/Patio/Porch Addition: Returns an average of 90.3%
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Basement Remodel: Returns an average of 90.1%
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Replace Windows: Returns an average of 89.6%
Small reno projects can also make a huge difference. These can include paint (see my newsletter last month for the best colors), replacing the vanity in a bathroom, updating and matching kitchen appliances, replacing kitchen countertops, installing custom shelving in your closet, adding backsplash to your kitchen, or adding custom shadow boxes and trim to spruce up your dining and living room.
Investor Tips
Latest News
The eviction Moratorium in Illinois- As of April 2, 2021, Governor Pritzker extended the eviction moratorium to end of May 2021. This is is a modified version of the previous, where tenants need to meet certain financial criteria.
Screening Tenants
Screening potential tenants is extremely important, specifically running a credit report. These are the top things to look for in a credit report:
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Late Payments (will show
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Large Debt Load (almost maxed out credit cards, car payments)
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Delinquent accounts in rental history
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Derogatory marks (such as bankruptcies, foreclosures)
There are always considerations to be made. Perhaps the tenant had a hardship years ago and that would explain late payments, though now has been current on everything. The credit report gives you an overall look into the credit history of the applicant. Consider using a platform like My Smart Move to run reports.
If your property resides in Cook County, be sure you are complying with the Just Housing Ordinance when screening tenants that went into effect in January 2020.
Thinking of purchasing an investment property to add to your portfolio? Contact me, and we can go over your goals.
If you already own an investment property, can you capitalize on this inflated market by selling your investment property?
Top 3 Things to Look for in an Investment Property
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Property Analytics. What amount can you rent the property for? Then, take into account all of your expenses for the property- your mortgage, taxes, regular maintenance, association fees, monthly expenses, etc. What is your CAP Rate? You can expect about 50% of the monthly rent to go to expenses.
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Potential to Appreciate. Is the property in a good location with the potential to appreciate? Is the area growing in terms of businesses? You may want to sell your investment down the line.
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Location. Is the property in a desired area? Examples would be near schools, near transportation, near shopping. This makes it more desirable to rent.
