We all know that a house is one of the best assets to own if you’re trying to create a capital. And one of the best ways to get a return on the investment of a house is to flip it. For those unfamiliar, “flipping” a house is the practice of purchasing an old house, known as a “fixer-upper,” and renovating it so that it brings in a much higher price on the real estate market. For people with a love of hands-on work and a mind for interior design, house flipping can be a fulfilling and lucrative pastime.
But when it comes to renovating an old house, there is a critical budget question— what needs to be replaced, and what can be restored? You’ll want to carefully plan this out before starting renovations, poor planning can result in renovations going over budget and create a loss upon resale. To avoid this, let’s go over what needs to be replaced, and what can be restored.
Elements to Replace
Before you begin drawing up renovation plans, first do a full inspection of the house and take note if there is any damage caused by water or insects. Anything bearing insect or water damage must be replaced. In addition to anything damaged, the following home elements will want to be the focus of your renovation budget.
The average roof should be replaced every 15-50 years, so if the house you intend to flip is greater than 50 years old, it will likely need a new roof. Because replacing a roof can be dangerous, it is not advisable to make roof replacement a DIY project. You may think you’re saving some money doing it yourself, but medical bills can add up if you have an accident!
2. Water Heating and Air Conditioning
Most vintage homes were not built with air conditioning or efficient water heaters, and most modern buyers will not purchase a home without such amenities. If the old home has a boiler, that can usually be replaced, and radiators can be kept if they are still working well. If you find an old air conditioning unit, make sure to inspect if it is working properly. It might need something as easy as a filter replacement (dirty filters cause poor airflow) or it might need to be replaced entirely.
3. Anything Containing Lead or Asbestos
We all know that lead and asbestos were commonly used materials in the past and that they are toxic. If you intend to sell this house to a family, it is your duty to hire an inspector to check for common health hazards and replace anything toxic. If you find any lead-based paint or asbestos-laced insulation, you will need to hire a trained and experienced professional who can safely remove hazardous materials. You may not be able to find historic replacements for these items that are not laced with toxic materials, but modern nontoxic lookalikes can be purchased.
This ties into the last point, have an inspector check the plumbing, pipes in old houses can often be made with lead which can get into the water. If the pipes were replaced or first installed in the 1960s, they could be made of galvanized steel, which has issues with corrosion and rust that can discolor tap water. If the pipes are made of copper, it might be possible to keep them, but listen to your inspector’s opinion.
Modern home electrical wiring systems are 3- or 4-wire and require a ground. Old houses’ electrical wiring often only has a 2-wire system and no ground. You will probably need to replace the wiring to bring the building up to code. This is also a good opportunity to add electrical outlets to the house, which is a selling point to tech-heavy buyers.
Elements to Restore
The following elements are less urgent to replace, and even just a simple restoration can preserve some of the home’s vintage charm.
Older homes often have hardwood floors that can be refinished, even if they have been carpeted over. After the carpeting is removed, inspect the floor for warping and signs of water and/or insect damage. If the floors are damage-free, they can be refinished to look like new.
They certainly don’t make doors like they used to! Old doors are often large, heavy, and often have intricate carvings that can be hard to replicate. These can be sanded and repainted or re-stained instead of replaced. The façade of a house is a key selling point, so play up the vintage charm by keeping the door and refreshing it with a new varnish.
Glass is another item that is produced differently nowadays, so replacing old windows can be very difficult. It is important to inspect the frames for insect and water damage, since drafty windows can add up in electric bills. If the frames and sills are free of insect and water damage, just repaint them to look like new again.
4. Trim and Molding
If you’re lucky enough to find a home with its original trim and molding, keep it! For buyers in the market for a restored vintage home, the trim adds to the vintage feel. Trim can be sanded and re-stained to freshen it up a bit, but keeping the trim and molding will definitely save on renovations.
5. The Fireplace
Many old homes come with a fireplace, and this adds a rustic and cozy charm, which in turn can be a selling point. Sometimes previous homeowners brick the fireplace closed, add ductwork, or completely drywall over them, so if your vintage home still has its fireplace, consider yourself lucky!
You will absolutely want to draw up a plan before you begin to renovate your vintage home. A good plan can lead to a major profit upon sale, poor planning will have renovations going over budget and leave you in the red. The costs associated with renovating an old house to be flipped can be daunting, but with some proper planning and shrewd renovation strategies, a vintage home flip can lead to a major profit and add up to your assets that generate cash flow.
About The Author: Ellie Lott. I’m passionate about millennial financial planning and use my website to help educate my generation on making smart decisions with their money.
Photo by Benjamin Rascoe on Unsplash
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