July 31, 2007
21 Home Design Secrets of the Investment Savvy
I’m sure each and every one of us has a vision tucked away somewhere of just what our dream home would look like. All of the luxury features and add-ons are wonderful ideas for our own dream homes, but they don’t necessarily equate to profits for investment properties. Here are 21 of our favorite home construction ideas and design tips used frequently by the investment savvy.
Choose The Right Lot – When building a home for investment, the general consensus is that keeping costs to a minimum is the best method. To that end, a flat lot that doesn’t need massive excavation or extra concrete work is your best bet. It is very difficult to recoup these kinds of expenses.
Pick the Perfect Neighborhood – Not the best neighborhood, but the most profitable. Do the research on your demographics and you’ll probably find that middle of the road is the way to go for investment property. You certainly don’t want to be the most expensive home in any neighborhood. Also worth considering are the schools, traffic, taxes, etc.
Don’t Build on Shaky Ground – Make sure there’s no water or soil problems that will be costly to fix with the lot you choose. If so, you’ll find your costs will skyrocket and your potential profits will tank. It’s worth getting things checked out beforehand.
Size It Right – The very best investment properties are built with just the right demographic in mind. Many find the best properties for profit are smaller starter homes or rental properties. It’s harder to find someone to buy or rent an expensive luxury mansion than it is for nice sized efficient quality housing.
What’s the Story – You’ll want to keep the architectural features compatible with the area the home will be built. Is the area predominately one story ranch style houses? Two story homes often work better for taking advantage of a good view.
Stock Plan – Consider using a pre-made plan that you can just buy the blueprints for. Many times, a build as you go or contractor drawn plan will make costly mistakes. And paying an architect to devise a full on custom design will eat up your profits faster than you can possibly imagine.
Be a Square – The closer to square the overall home and floor plan remain, the more efficient it will be cost-wise. Rooms that stack up on top of each other reduce material and construction costs dramatically.
Solid Value – Choose materials that are good quality, but middle of the road. It’s much harder to realize value on an investment property if you stick all of your funds into high end custom materials that only few can afford. Provide the perception of value to potential buyers. This also means possibly skipping over the expensive details that you would want in your own home, such as extra fireplaces and extensive landscaping.
Standard Size – Keep things easy and maximize profit by using standard sized materials. Windows especially get really expensive when they have to be specially ordered and made.
Bargain Built-Ins – People love built in features such as shelves and ledges. Often these cost very little to add at the point of construction, but bring big value later on because they give a high end feel to a home. Details are definitely worth considering, but be careful not to over do them.
Fit and Trim – If the comparables to the investment property you’re developing have trim upgrades such as crown molding, tray ceilings, or other extra details, you might want to consider adding them also if it can be done affordably. Again, don’t get carried away. A few thoughtful extras usually go a long way.
Keep It Open – An open floor plan just goes over so much better with today’s style of living. Home buyers will appreciate the added feeling of space that the open floor plan gives.
Bright and Airy – It’s a must to keep the kitchen especially bright and airy. Make sure there’s plenty of natural light and tone down dark colors to reduce the heavy feeling.
Successful Cabinetry – Save money in the kitchen by using prefabricated cabinetry. If you plan dimensions and construction of the kitchen around off the shelf cabinetry you can save a ton of money while still giving a high end custom look and feel. Also, neutral wood cabinetry usually has broader appeal, an important factor for investment property.
Stack Bathrooms – By placing bathrooms on top of each other on a multiple story or next to each other on a single level home, plumbing will only need to be run to one general vicinity instead of all around the house. Again, cost savings are significant.
Add A Computer Nook – Now days, the computer is an integral part of every day life. Take advantage of an available nook or cranny and add built in shelving and sufficient wiring for placing a computer there. The wow factor will probably overcome the cost.
Be Efficient – Potential home buyers or renters are being hit hard these days by increased utility costs. You don’t need to spend a fortune, but use added insulation and energy saving appliances as a selling point.
Closest Space Is Important – If at all possible, maximize closet and extra storage space. It will be appreciated and goes over well as a selling point.
Keep the Fixtures Simple – It’s easy to spend loads of money on the trendiest and costliest faucets and light fixtures. But very rarely will these convert to profit. Buy good quality, but off the shelf. Fixtures will almost never be a deal breaker with the potential buyer.
Paint it Neutral – Use non restrictive and neutral colors when painting. Actually, most new homes are sold finished with contractor white, but if a light khaki interior shade is the color of the year, using it might increase appeal and therefore profit. Use judiciously.
Be Your Own General Contractor – Here’s a surefire way to save cash on building a home if you’re sure you’ll be up to the task. Read up first, it’s never as easy as it sounds and there’s plenty of liability involved. If you have any doubts at all skip this step!
