If you are looking to make money investing in real estate, one of the most common ways to do so is to add value to a property. By identifying property defects and/or detractors (things about the property that turn people off) and then cost effectively rectifying them, it is possible to dramatically increase the value of a property. The trick is ensuring that the improvements you make generate a positive ROI. In other words, the value after repairs (increased rent, property value, etc.) must exceed the cost of the repairs/upgrades. The most common upgrades that generate a positive ROI for investors are Kitchens and Bathrooms. For the purpose of this article we are going to focus on Bathrooms. Whether you plan to market your property to renters or prospective buyers, they are both going to want nice functional bathrooms.
First things first – you need to think about what items you are going to include in the remodel, from water saving showers to best flushing toilets. How do you figure out what you should include in the remodel? The easiest, and probably best, method is to spy on your competition. If you’re planning to resell the property, then go scout out other homes in the neighborhood – what types of things do you find in those bathrooms? What features, materials, etc.? Now, that you know what the competition is offering, plan to one up them. Bathrooms are one of those things that can help set your property apart from the competition, so make sure your bathrooms are a notch above the rest. When trying to allocate your budget, concentrate your efforts on the master bathroom most importantly – while the kid’s bathrooms should be decent, you want to impress the buyers first and foremost, not their children.
Before you go too crazy, though, don’t forget about the budget; property investment obviously is not going to work if you spend more money than you can get back from increased value – never lose sight of the ROI. So now that we got that out of the way, how much is a bathroom remodel going to cost?
Basic bathroom remodel
One of the biggest deciding factors in how much a bathroom remodel is likely to cost is the size of the job. We are going to start by looking at a basic bathroom remodel. If the bathroom of the property needs more of an uplift than a complete overhaul you may only need to do a basic remodel. You could replace some of the fixtures, such as putting in a new tub. You could also put in some new light fittings and repaint the existing cabinets. If you do most of the work yourself and/or use off the shelf products, you should be able to complete a basic bathroom remodel for between $3,000 and $15,000. Remember that the look of a bathroom is one of the first things that attract buyers/renters so it might be worth spending a little more on the accessories you use.
Mid-range bathroom remodel
If the bathroom is in need of more work, or you want to make a statement with the room and quality fixtures, then you need to be realistic with your budget. Depending on your location, and how much work is required, you should be prepared to pay anything from $15,000 to $30,000. For this price you should be able to get a better flushing toilet, better performance from the faucets and shower and new cabinets. You may also be able to make minor amendments to the plumbing.
High-end bathroom remodel
If you are aiming to attract high end renters or buyers to the property, you will probably want to make sure that the bathroom looks incredible as well as preforming at a high level. Often this means that you will want to just start from scratch. If you remove everything from the bathroom start fresh – including moving the plumbing around – then you need to be prepared to pay the price. A complete remodel like this will normally cost between $30,000 and $100,000, or potentially even more. Of course, you have complete freedom of design and you can opt for individually designed cabinets and accessories for that special touch.
As you can see, bathroom remodels can come in many shapes, sizes and prices. Before setting your budget, and deciding on what to include, make sure to scout out the competition – make sure your bathrooms set your property apart in a good way, and not in a bad one. As an investor, though, don’t lose sight of the end game. You want to make your property more valuable, but at the end of the day you’re making the upgrade because you want to make money. If you spend $30,000 to increase your property value by $10,000, that math isn’t going to work in your favor. Make sure every dollar spent adds more dollars to your pocket.