it's not just about money. It's about time. the actual definition of investment changes the longer you own your home.

just because you're not going to get the dollar for dollar back for putting a roof on, you are going to prevent issues that are going to lose you money

what are the things that I can do to get my house ready for when I do sell in four or five years,

painting is the easiest thing that you can do to better show your house.

We're real estate ninjas I'm telling you right now, we can tell immediately whether a professional Or the homeowner painted that house there's no one really better suited to talk to you about home improvements than realtors. We bring buyers into homes and we see what they like and what they don't like.

So that's exciting,

So what are talking about today?

we're talking about, return on investment, on homes.

on, home improvements

that's what I meant ROI on home improvements. So Tin, the tool man, Taylor edition.

edition. I talk to my clients all the time about this, and I have clients who have bought homes, I have people who have never used me, but they own homes, and they want to know what the ROI is, and the return on investment for certain projects. I like to talk about this in a couple different ways. one is from a time standpoint. on one side you have, flips, which is someone buys a house and they sell it within six months, all the way to someone who buys their forever home, which is you buy it and then you live in it for 30 years. The ROI on those improvements changed dramatically over that timeline. The flipper

which I think is why this is important to talk about too, because I like that you think of it on a scale to a degree I agree obviously, but whenever somebody comes to me, my knee jerk response to that is. obviously, it's, and I like, think of like a black and white answer, it's like the best, return on investment

Yeah. Yeah. People make the mistake of saying, if I put a 40, 000 kitchen in, am I going to get 40, 000 out when I sell? And I'm like, well,

But you're right, there's more questions to ask

a lot more complications. Now, if a flipper asked me that, That's a fair question because they're not gonna use it. they don't give a shit They're just they want to know it's a formula. It's a mathematical Computation if I put a certain amount of money in will I get that money plus a little bit out? And even if a flipper takes a kitchen puts a 40, 000 kitchen and they get 40, 000 out, it's actually not worth it. you might reset the, the market, the neighborhood record for a sale, but it's not just about money. It's about time. So even a flipper in a general sense has like a very small amount of consideration for

a flipper?

Oh, a flipper is somebody who purchases a home and then fixes it up and then puts it back on the market and within three to nine months.

It's an investment

It's an investment property and I, I use flipper cavalierly because I'm thinking a lot of people, I think flip has become part of the vocabulary, but that's a

In our world.

HGTV, they've kind of made that a normal term, but

Oh, we actually credit them for something.

Yeah, we can credit them or something helping us in some way. so then you have somebody who buys their forever home and let's say they want to put that 40, 000 kitchen in to their house. Now if that forever home owner Put that kitchen in but sell it in six to nine months They're not gonna do that because it's their forever home. But if they wait 30 years it matters a lot less what some things work because you're gonna enjoy it for probably 15 to 20

I mean, it's saying what's it worth to you? And it doesn't necessarily mean it has to be monetary or

well, I think that the way to really unpack it is when you have somebody with 30 years, you have to really think about what you mean by the word investment. So if it's an investment for a flipper, it's a straight number computation. And that's totally fair. But an investment is not just about for the forever home. People is not just about. you know, dollar in, dollar out. It's an investment of hey, you're going to wake up and make coffee every morning in this kitchen. You're going to have holidays in this kitchen. you're going to have hard conversations in this kitchen. You're going to be doing things in this kitchen for the next 15 years. It's the

going to have your husband butting up behind you while you're trying to make dinner. Do you really want to fix the layout so that he's not?

and it's a quality of life thing, people talk about all these little things, in terms of improvements and really the investments, like the actual in definition of investment changes the longer you own your home. you wanna put a pool in if you're gonna enjoy it for. 30 years like it's okay to overspend on it because you're going to extract value from it, you know Now if it's a roof, which is something you don't like quote unquote enjoy It is actually a good it's a good investment because it does head off a lot of other problems the roofs can leak for years. You have no idea. It's taking care of the asset that falls a little bit more into that more investment bucket

so talking about roofs, because this is something that I think it's a misconception that people don't realize or understand is, does a new roof add value?

A roof can add value, from an appraisal standpoint, not as much, but a new roof, it does not necessarily add a dollar for dollar. So if you go and spend 15, 000 on a roof, you're not necessarily going to sell your house for 15, 000

now on the flip side. So what I will

I was going to finish my

but I think you're going to make it before me. And I want to say it

you want, you want tell,

is so It doesn't add dollar to dollar value, but, it does add sellability and it can be the difference maker between if a buyer's looking at three houses and they're all around the same price point. If one is going to give them less problems they already know that one of the big ticket items was taken care of and not going to be put on them, then they're going to buy your house if you want to think of it this way, then like technically it does pay for itself. It's better than not getting an offer. Yeah.

Yeah. roofs fall into what we call big ticket items. HVAC windows, roofs, water heaters, which isn't really a big ticket item. it can be if it doesn't work for you. Those are the types of home improvements that are, more of the home maintenance side where you not only, replace them so they don't falter themselves, but they also don't allow other things to falter inside the home. So what I mean by that, like

prioritize things to put your money towards when like investing into your home, just because you're not going to get the dollar for dollar back for putting a roof on, you are going to prevent issues that are going to lose you money getting it

Yes. So they, so that invest that return on investment isn't necessarily a straight 15 in, I'll get 15 out. And it's also not like an intangible investment where you get to enjoy it. Like you're not going to go out to your front yard and look up with your wife and say, Oh honey, I just love our roof.

Oh, I do. I got a new roof three years ago. I've never

well, that's, that's, that's, that's, that's cause you're weird. You're weird. But

cause I'm a homeowner and say, look at that nice

well, you also got a free roof. the roof on this rancher here is, not

350,

so that's the other side where the investment is really about heading off. Other things that can go wrong and making sure that you're going to not have an insurance claim because when you have an insurance claim We've talked about insurance before on this podcast. That can be problematic as well

Because what makes sense is to get penalized for using something that you're paying for.

Yes, but it's all based on risk next 10 years is going to really show whether a homeowner's insurance is going to be rocked in the next 10 years.

mean, I guess they, they just don't want it to be like, boy, who called insurance? Like.

Yeah. Yeah. they need to make it somewhat prohibitive, because otherwise, there wouldn't be any insurance at all.

Yes, so to get to something you said you said you have a scale, and if you're starting at the investor side, it's like a flipper. something that I think is very commonly also, Misunderstood is that they want to do the cheapest options so that they can get the most return on what they're investing in and I can't disagree with that more. Yeah,

Yeah. It can you it absolutely. Investors absolutely can cut

that there is a strategic way to still be able put money in spend like more than you know the cheapest option because again it's being able to present and i think it's important to be if you're doing it for the intention of flipping it and somebody else buying it is putting them in safely so i know this is more of a like dollars like

a flip is a house that has been torn apart, put back together again, but nobody has gone and used the toilets day after day or pulled on those faucets or use the door a day after day. And so a lot of times what can happen when you buy a flip property. Is that, you got to break it in but then the flip side is if you bought a house that someone has not really updated recently, but it's been owned for the last 10 years. There's value in the person like speak to it and the door isn't going to fall off. hopefully the door doesn't fall off, but it's like that door has been swung by the same person for years and years and years. Odds are after you take ownership, you're not going to have a problem.

that goes to say, too, with the seller's disclosure, so, so disclosure is required at least, I'm sure it is in every state, but we're speaking Pennsylvania, obviously, is something that you have to have when you're selling a house. the seller has to fill out to disclose any material defects and reading one from somebody who has lived in it and knows their house really well is a lot more comforting and assuring to the person who's buying it versus somebody who has never lived in it. there's ways around it. You never know, who they bought it from and what's You know, happened before then, there's a lot more questions and what ifs and I think we should do a whole episode, alone on people buying flip homes. And that'll probably be another day because I have plenty to say on that too. But like you said, there's not as much to read up on it because they don't know. And that's not their

Well, Investors are putting things into a home that they're never going to have to use. They never have to go through the frustration of a failing versus somebody who's putting in a kitchen that they're going to have to use for the next 10 years. They're much more incentivized to build it right so that they don't have problems after problem after problem. in the microcosm of this topic. Yes. Things are generally done better on now. There are some investors who would very vehemently disagree because they have a lot of pride in what they do,

Yes. And those are the ones that I will work with and that I trust.

but mostly investors, It's about speed and money. the investment, it's a straight line dollar, dollar consideration.

My ethics and morals just play so hard into that side of things because it's I understand that you have a line item to me and that you have a breakeven and you have a profit margin that you have to make, but I am so dead zone. You better make sure that people are getting into houses safely and that you are not setting somebody up for failure just so you can reap a profit.

right. And the investment side, I help a lot of investors every year, but it is a sandbox that I agree with you. I have a little bit of a trouble navigating because it's just more about the money. It's not about, families transferring homes. And it can sometimes violate fair housing, uh, ish, sometimes older couples, they really want a family to move in. Cause they like, they want someone to pass the baton. you can't do that, but I know that's what is being thought of when they decide on who they want to choose. that's not a thing in the investment space. I mean,

Oh yeah, no. There

well, I mean, some investors can you can pull on their heartstrings, but it's really looks like least contingencies, most money, fastest settlement. it.

like my investor and he is responsible, which is why I work with him and I trust the quality of his work. And I feel good putting buyers into the houses that we are selling. but it's funny, we make a really good team because he is that. I don't care who they are, like, do they have money to buy the house?

like, it

then I have to bring the human side to things and actually feel for these people and

yeah,

liaison. The

other thing, while we're talking about investors, a good rule of thumb is if you go into a flipped home, find out who that contractor is, because if they do a lot of work in the area, they're more likely to do quality work because they do not want their reputation, damaged versus a guy who's in Philly, but he comes, 20, 20 miles outside the city and then he's 20 miles here, 20 miles there and they've got some like LLC and nobody knows who really who it is like that's a different thing, but if you find these little local flippers who are usually they have other jobs, they just hire contractors to do all their work for him that can sometimes lend itself to higher quality, but Almost every flip I've ever had someone purchase, there's been an inspection done. And if we don't get that house because they won't allow inspection, then.

has been through at

Or an inspector's been through it, or somebody has come through with another set of eyes because it's really hard in that space to know, what's what. So you really gotta get an inspector to get in there. And even then it's, it can be tough. but I want to talk about one other thing. And with this topic and really the main question that I get is what actually does give you a return on

that's what I was going to say is, so now we

I stole it from you again. That's

We're going in the same direction. So we're back to your scale. So we covered the one end

Yeah. So let's talk about the forever home people. if there are improvements to be made on a home, and we're not talking about rooms, we're not talking about windows and all that stuff that nobody really cares about or gets to enjoy or see or show off, anywhere you can fetch water. So bathrooms and kitchens are where you're going to make up the most ground because they're high ticket items. They're front facing. And it takes a lot of if you are planning to sell soon. It takes a lot of the onus off the buyer. To not only financially do it, but to logistically do it. If you've got a kitchen that's finished, you can deal with any other home improvement that's going on in the house. and I'm, I speak from experience. I've renovated a house. I've put an addition on a house. and as long as you have that home base to like grab your coffee and your milk out of the fridge, like it's a lot easier.

maybe have a toilet.

yeah, and have a toilet and have a bathroom. So that's where I usually tell people to start. Painting and flooring is another one where you can make up a lot of ground. Well

another one where you can make up a lot of ground. it's somebody who wants to finish their basement. They really want to update their bathroom. They would like to update their master bathroom. They'd like to update their kitchen.

their kitchen. I'm sorry, did you say master

Sorry, primary bathroom, primary bedroom. I'm following the law. I promise don't revoke my license or fine me. Um. They want to replace floors, they want to knock down walls, whatever, but like they have this list of things they want to do, I they want to know where to start if they can't finish everything. Yeah,

And so in that instance, and I have clients, that just reached out to me last week who, who are asking me about this, you get the list. We bring out a general contractor. We get estimates for all of it, regardless if you have the money, just give me your wish list. If it's 100, 000 worth of work, 200, 000 worth of work, because then that gives you the framework to do it. Start saving for it if you don't have all the cash. The other thing that I often tell people to do is bring out an inspector. And people are like, wait, I'm not buying or selling a house, why would I bring out an inspector? A maintenance inspection will save you from the trouble of finishing the kitchen, depleting all your funds, and then your roof starts leaking.

when I was selling, the house last year, my seller was like, well, what should we do to the house? we were getting ready to sell it. And I said, listen, I can give you my opinion. So I guess, should we, update the bathroom? Because that thing was ancient. That was like the blue tile and like fluorescent lights in the ceiling. it was pretty dated. But with where it was, I said, listen, if you want to know exactly what you should do. I said, get a pre listing inspection. Not everybody necessarily agrees that it's a good idea. You and I have gone back and forth whether we think it's a good idea or not too. But for them, I said, listen, I gave him the pros and cons to both. I said, here's how it can work in your advantage. Here's how it could not work in your advantage. And it could be a disadvantage but I said, what's more important to you? would you rather have something in front of you to give you a checklist? of what needs to be done to your house, and then I can give you guidance on a buyer's perspective of what's going to be more important to them, and then go from there. So we just got the answer key, got the pre listing inspection, had him come in, and he gave us, everything we needed to know,

I try and I'm not very good at it and I don't know why people more people don't do this, I have a client down and on Philadelphia's main line. He inherited the house. The house has some deferred maintenance, but they want to put a big addition out the back because they're a larger family than he is. He's an only child and they have two kids, so they need an extra bedroom. I said, yeah, but what about what's, what else is going on at the house? Like, how old's your boiler? How old, is your air conditioning unit? How old's your roof? All your windows need to be siding needs to be redone.

because it's like, it's the stuff that you don't, Like you see a brand new shiny

new shiny

but like

That's

see the roof when you're inside. You don't see like the windows will be there regardless, but it's like It's not

I hate to say it and I know that you know I don't want to assign this to people but people like to show it off They like to show it off the same way as and they drive a nice car. I mean

Meanwhile, my neighbors, down the street somebody on my street got new windows, two weeks ago and I was so jealous.

And

now I look at them every time I drive by, Oh man, like there's a nice windows

look at those nice, energy efficient windows.

but all our houses on our, in our double cul de sac, we're all pumped out at the same time in 1997. And yeah. anytime we all need new windows and they got it. And I was like, Oh, that's so cool. Yeah,

you're a seven year homeowner, so that's where that

so that's what I mean. It's not. And, almost everything in real

It's not, like almost everything real estate, there's no straight line.

But I will say if somebody does want to know, like you said, with your line or your scale is it, what is it, Sliding, sliding scale. Come on, Jen. whatever, Semantics. It all depends on where you are on it, what does value mean to you? Is it something that you need for yourself or is it something that like, I had sellers last year they completely gutted the house and completely remodeled the entire thing in 2018, knowing they would be selling within the next five, six years and the decisions that they made were based off of the fact that not necessarily personal taste, but what is going to appease the majority. you're going to sell or you're going to sell that,

That is the same mentality where it's like, Hey, what are the things that I can do to get my house ready for when I do sell in four or five years, And that, that even comes down to the kitchen finishes. It's not even a matter. They've already decided they're going to do the kitchen. But what are the kitchen finishes that are going to, resonate and I'm just, you know, you always try to just blend it down, don't do anything too crazy. nobody's putting granite in their car or their granite countertops

because it's not 2004

Well, no, but it's like those trends, but I mean, generally more muted, neutral things will carry

Greys are going out. It's about throwing in pops of color now. Thank God. But there is at least a parameter of being able to answer it is if you're trying to choose between a list and let's put deferred maintenance like aside and let's just say that everything is well and functional in your house you're talking about remodeling, things that sell a house are. Kitchens. Primary bathrooms and bedrooms, not masters. Painting. painting is the easiest thing that you can do to better show your house. I would say that more goes into like, to showing your house, not necessarily like,

like, Uh, the hell it's not. some houses you get, you can pay 20, 000 to repaint the inside, like repaint it well.

Well, yes.

And that is

Never hire me to

Yeah, never hire me. You hire her before you hire me. It's gonna be, it's ugly. But I can tell you right away and we're realtors, we're real estate ninjas I'm telling you right now, we can tell immediately whether a professional Or the homeowner painted that house and that so that is an investment. It's not just about hey, You know put some put a cookie tray in open house sign paint and that's a painting in some in cases inside of a house, especially with a lot of trim lot of transitions and stuff like that can get very expensive very very quickly the other thing that we

my neighbor's the other day though, and we're talking about, getting her house ready to sell at some point this year. And the first thing she said was, first thing you need to do is paint the ceilings. And, I melted. I was like, you're so right. such a big difference. It does.

does. It does. The last thing I want to talk about, and then we can wrap up, is outdoor spaces. So patios, decks, pools, some pools are a little bit of a 50 50. Some people think that they're a drowning hazard. The other people just see barbecues and the, family reunions of their dreams. but outdoor spaces. Covered outdoor spaces. I put a screened in porch on my house. We love it.

It's so

It's so nice. And so Those are the other things that people

My deck sold me my house. I saw my deck and I was like sold. I

got a do you have a southern exposure Western exposure you have Sun on your deck all afternoon

I am like the most geographically dumb person.

at four o'clock in July

sets in my corner of my backyard. And it's beautiful.

back here you don't mind you don't mind the Sun beating down on your deck

on your, your No, it's I love sitting out like, especially in the spring and summer, I love going out on my deck, eating dinner outside, watching the sun go down. It's so nice. It's nice.

It's nice.

Sometimes. It wasn't fun when it, dry rotted underneath of it and then I had to get that fixed,

the way I just want to leave this is, the real estate consumer will go to Pinterest. They'll go to Google. They'll go to some list somewhere, but there's no one really better suited to talk to you about home improvements than realtors.

Yeah, that goes into one of our first episode as far as like when to talk to a realtor. it doesn't have to do anything

With

with moving. Yeah.

and moving, it's like I, I have ongoing, like almost real estate consultancy I'll get a photo of samples from like a design center or somewhere and they're like, which one do you think is like the most attractive or what are the trends saying? And I'm not like a interior designer by any stretch, but I know,

buyers and see what they like

they like. Exactly. I bring buyers in that. We bring buyers into homes and we see what they like and what they don't like. And I also go into this like model homes too. And those people have done the homework for us where those are the trends that are coming. and some people are like, I don't give a shit. I want a trendy. I want like the latest look. I don't want to do something for five, six years down the road. If it looks like shit and likes it two years, then I'll change it. a

times too, though. So like we are, we're constantly around that kind of stuff and seeing it like move in real time, but like it, sometimes it takes a while for those things to communicate out to the general public. Like the grays are, they're out. That's done, but like it, it can take a while for that to travel to the average person to know. And then they put all this money in and by the time it reaches like a more wide

for like the lime green 60s patterned. Look to come back, man. I think it would be like totally retro. Forget black and white. I'm talking like, if anyone would ever back to

husband wants to have a seventies inspired house. fun.

it is not, up for debate. Hurt away is the only way. But no, so I think we've covered a lot of ground, but listen, if anybody out there is looking to do home improvements, You really should get an inspector in you should get a general contractor You should call a local realtor to come in and advise on What your goals are if you're not gonna sell in 20 years great But if you're gonna sell in two and you want to invest money in that property You should talk to the people that are dealing with these investments all day every

like to throw one more thing in there though. I have a warning of make sure that whoever you are getting the opinion from, I would encourage to get somebody who does not necessarily have a financial stake in getting the job because they may push for the more expensive job for them, not necessarily what is the best investment for you to put your money into at the

the

make sure it is somebody that you actually trust.

why I really, your realtor should be partnered with that instead of leaving yourself to, the whims of the contractor world. So it takes a team, even if you're not going to sell, even if you're not going to buy, whatever, you should surround yourself with people who are in this all day, every day. I'm sure you're great at whatever you do all day. This is not what you're supposed to know about and that's what Realtors are for

Unless you're an interior designer, then actually I'd really like to get your take.

Sure, we'll hire you and then you can we'll take you bring you over our clients house.

Yeah. You can come on our podcast, but

See you guys

Bye.