Believe it or not, there is such a thing as overdoing it when it comes to rehabbing your property. Planning the transformation stages to turn your beastly property into a beauty can be exciting and as a result, far too many inexperienced flippers end up sinking too much money into their rehab, thinking they’ll make it back tenfold when they sell the home. This is not always the case. It’s far more important to rehab smart than rehab more. Here are some constructive cautions to be aware of as you plan and execute your property rehab:

5 Cautions Against Over-Improving Your Rehab

Caution #1: Don’t Over-Improve for the Location

Everyone wants a delicious piece of the get-rich-quick pie, but no matter which way you slice it, there are rules to the fix & flip game. One that far too many people overlook is the importance of evaluations. A good evaluator will inspect your property and compare it to the kinds of prices homes are selling for in the neighborhood. This way, you can have a more realistic expectation when it comes to your overall profit. You can’t expect to buy a home in a neighborhood where selling prices are in the $300,000 range and expect to sell it for $600,000, no matter how good the rehab is. The key to really making a profit here is to find a dilapidated home selling for an extremely low price (say $80,000) in a $200,000 neighborhood. This way, you are nearly guaranteed to make an excellent profit after your rehab work is completed.

Caution #2: Don’t Add… Upgrade

Messing with the square footage of a house or adding a ton to the original structure can be messy in and of itself. There is a reason why we typically don’t fund rehab projects which add to the building foot print or include adding new exterior walls: this type of extensive construction typically takes longer than our allotted rehab timeline and requires more permits. Instead of going nuts with this kind of property enhancement, focus on upgrading what already exists within the home. Instead of adding an exterior wall to make the kitchen bigger, try knocking through an existing, non-supporting wall inside the home to give the kitchen an open floor plan.

Caution #3: Don’t Over-Rehab a Room

Say you’ve done everything you could to turn a bedroom into a luxury suite with a larger bathroom and added an attached deck. Believe it or not, over-improving a room can scare buyers away. This is due to the fact that adding to the square footage can put your resale price at or over the highest prices in the neighborhood: see Caution #1. No one wants to purchase the most expensive home in the neighborhood, so make sure your rehab work is improving the home to make it comparable to prices in the area. Also, make sure to do your research about what most buyers in the market will be looking for in a property, rather than your own personal rehab vision. Your goal is to resell the house quickly, not to hang it on your mantle as a credit to your luxury-laden genius.

Caution #4: Keep the Bedrooms down to a Minimum

We are living in an age where, demographically, Americans are having fewer children. Therefore, the need for the 7-8 bedroom plantation has gone with the wind. Focus on finding properties to rehab with four or less bedrooms, and don’t attempt to add any more bedrooms to an existing structure. Like we emphasized in Caution #2, the construction can take longer, cost more and end up eating into your profits. With a four-bedroom home, an excellent selling point would be advertising that extra bedroom or two as an office, man cave or hobby room. But generally, when it comes to bedrooms, less is more these days.

Caution #5: Be Careful When It Comes to Landscaping

This is another great opportunity to keep in mind what the everyday buyer will want in your property, not what you will want. With every renovation you make, you personalize your house and you need to let it appeal to as many buyers as possible. Add beautiful, lower-maintenance features to your landscaping and keep in mind what will attract the buyer. You may think a pool will increase the value or be a great selling point, but many buyers could view it as a nuisance or a hassle to keep up.

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