You’d heard TV was bad for you, but did you know what watching the “Educational programming” can do to your real estate profits? In this episode, I’ll reveal exactly how following the tube-touted experts can lead you far, far astray. First, though, I want to mention something that could really help your buyers (and by extension, you) out. A new type of mortgage lending program is trending at the biggest banks in the country, and the upshot is that they’re offering really low down payments to qualified buyers who are, well, not always even aware that they could be in the market for a home. Get the details on these pro-buyer programs and how to leverage them with your own deals in the News and Networking Section at REI.Today.
Now, back to demolishing 70 percent ROI…
If you’ve watched even one single rehab or flipping program on a certain much-loved home improvement network, then you know that at least on the small screen, a kitchen rehab is crucial to successfully doing, well, just about anything in real estate ever. And, hey, it makes for great TV. Setting aside for the moment that you don’t always need to redo the kitchen on your deals, let’s focus on the fact that kitchen renovations are indisputably at the top of the pay-off list for home improvements. Year after year the kitchen renovation wins top honors for biggest payoff. In fact, US News & World Report has estimated year after year that the kitchen is among the biggest bangs for your buck when it comes to payoff after rehab, predicting values near 70 percent over and over again.
However, while a kitchen is a great thing to update, one single decision could make or break your trip to the bank. According to many design experts, that decision is literally “on the counter.” That’s right: the wrong countertops can not only send buyers away feeling cold on your listing, but you’re probably feeling very tempted to make just about the worst mistake you can about counters if you’re watching too many rehab shows on television.
Ready for your mistake? Don’t assume that the best is the best for you. According to a report published by Builder.com, more and more homeowners and investors automatically assuming that GRANITE countertops basically need to be a given in a new kitchen. However, in reality, not only did consumer reports NOT give granite the best rating for kitchen countertops, but EVERYONE has them now and they’re not so “trendy” as they once were. While many investors simply assume that means they need to install the “next big thing,” in reality you will do better to install something timeless that will not only meet homeowner’s needs but will not scare off the buyer who doesn’t want yesterday’s big look in their kitchen.
Practically, this may still mean that you install granite, but go for a less showy stone – I’m not knocking it as a countertop medium in its own right. I actually love the way it looks, but buyers who care – and there are more than you might think, in large part also thanks to real estate “reality” television – trendy countertops, be they yesterday’s granite or tomorrow’s quartz and quartzite – can be left entirely cold on your kitchen if you’ve got the wrong look. And in an instant, that 70-percent ROI you were counting on when you installed the counter tops could have gone up in smoke.
The solution? Stay classic (and stay classy, REI Nation) with quality. Unless your buyers ALWAYS default to the best and latest (and believe me, they’re a subcategory and you already are WELL AWARE if you’re marketing to it), go high-value, high—quality, and a little less showy. Sure the latest reality television real estate investor can tell you – honestly – that the latest and greatest installation is paying off for them, but it’s paying off largely because THEY HAVE A SHOW THAT DEMANDS FLASHY BEFORE AND AFTERS, not because your target buyer is their target buyer. In most scenarios, a house will get more and higher offers thanks to solid workmanship and quality materials than thanks to special sparkly counters.
If the idea of 70-percent ROI on a kitchen renno makes you salivate, then you’re going to LOVE our Vault treasure today. We’ve got a list of the top 10 return-on-investment renovations for 2016 just waiting for you there. Already a member? Head over to www.REI.Today/Vault and log in for your latest training materials. Don’t have your access code yet? Get it now by texting REITODAY no spaces, no periods, to 33444, and I’ll provide fast, free access to that entire interview as well as a lot more seriously insightful stuff that will make your real estate investing safer, faster, and more profitable. So just text the word REITODAY with no spaces or periods to 33444 or visit REI.Today/vault to get access now…
When you do that, you’ll also be able to GROW YOUR NETWORK by interacting with me and your fellow listeners to REI Today… so stop by to ask questions, make comments and network with other investors across the country! Just text the word REITODAY with no spaces or periods to 33444 or visit REI.today/vault right now for your free membership.
Thanks for listening in, and if you liked the idea of 70-percent ROI, then you’re going to LOVE the next episode. Get this: a CERTAIN STREET NAME makes, ON AVERAGE, a 44-percent difference (to the worse) for homes with THIS WORD in their address. Get the word in the next episode before your comps go down the drain. And until then, REI Nation, always remember this:
Your Best investment is your OWN education.
Carole Ellis is the host of Real Estate Investing Today, a popular 9-minute daily podcast focused on educating real estate investors about the important topics that will make their investing SAFER, FASTER, and MORE PROFITABLE. She's also the editor of the Bryan Ellis Investing Letter. She has more than a decade's worth of experience in and reporting on the real estate industry and, additionally, has written dozens of courses on the topic. Carole lives in Kennesaw with her husband, Bryan, and four children. She believes wholeheartedly that your best investment is always your OWN education.