Make the right repairs
Smart improvements the Jason Cohen Pittsburgh way.
WHICH REPAIRS SHOULD YOU MAKE?
FLIPS V. RENTALS
REPAIRS OR IMPROVEMENTS?
HOW TO HIRE A CONTRACTOR
WHICH REPAIRS SHOULD YOU MAKE?
It's not just about making repairs — it's about making the right repairs. At Jason Cohen Pittsburgh, we've learned which home improvements offer the best return on investment.
Make sure that the property is safe above all else. You want your property to be attractive and habitable for your residents.
The furnace, plumbing, and general structure must be in working order. Mechanical repairs are some of the priciest and you want to make sure that these are addressed as early as possible.
The home should be attractive, but neutral. If you are flipping the property, buyers likely have their own ideas about how they want the home to look. Bright or dark colors may be polarizing and limit their ability to visualize the property. Use neutral paints and carpeting/flooring choices. Consult home improvement sites like Houzz to see what is currently popular.
Bathroom and kitchen replacements have the most value, but also cost the most to complete. Depending on the state of the rooms, these may or may not be worth the effort. If a home already requires replacement of all the kitchen cabinets, it may be wise to go for it and replace the entire space. When renovating an entire room, it's a good idea to purchase appliances and fixtures that are visually appealing to potential occupants, even if they are slightly more expensive than base model.
REPAIRS V. IMPROVEMENTS
Repairs are necessary to make the home habitable. When you make a repair, you are restoring the property to its previous good condition. It's important to note that you can deduct the full value of repairs on your taxes.
Improvements extend the useful life of a property by adding value with something that was not there before. You can deduct the value of the improvements after a set depreciation schedule, which comes out to a percentage of the amount you pay to improve your investment property.
RENOVATING FOR FLIPS OR RENTALS
Since you are selling the home to a buyer who will be living in the property, you'll usually spend more on improvements in flipped properties. These residents are more emotionally invested in the look of the home than renters. Although they will often wind up making their own improvements, seeing an aesthetically pleasing home often goes a long way in a sale.
You can get away with spending a lot less in rental property renovation. Rental property residents tend to take factors like location, space, and rent into account more than aesthetics. The home must be functional and presentable, but a new kitchen is seldom a deciding factor when a resident rents an apartment.
HIRING A CONTRACTOR
Make sure your contractor is licensed and insured.
ASK FOR SAMPLES
Seeing a portfolio of a contractor's work is essential to figuring out whether the contractor is capable of your job.
FIND OUT WHO IS WORKING ON YOUR PROPERTY
If your investment property requires a diverse array of work, odds are the contractor will have to use subcontractors and affiliates to complete some of the specific work — i.e., plumbing, roofing. Find out exactly who your contractor intends to hire, so you can properly vet those workers as well.
GET AN ITEMIZED BID
A detailed project plan should tell you how much the contractor intends to bill you for every service. Read the bid carefully to ensure that each item is billed at a reasonable cost.
WRITE A DETAILED CONTRACT
Detail all costs, time frame, and scope of the work to be performed. The contractor should have no excuses for why a job would be done over budget or over the allotted time period, or just done wrong.