Why House Flippers Always Remodel the Kitchen and Bathroom

Spreading the remodeling budget evenly over the entire house seems logical to many new real estate investors. After all, many investment properties could benefit from improvement in every part of the house. Yet, focusing your remodeling dollars on the kitchen and bathroom is a smarter move.

Keep Your Endgame in Mind

When you're creating your remodeling budget, it's helpful to remember a key difference between remodeling a home to flip and remodeling a personal residence. An owner who plans to live in a property renovates to make the home beautiful according to personal taste. In contrast, when you're flipping a property, you're remodeling to make the home marketable. 

Focus Your Attention Where the Buyers Focus Theirs

Kitchens and bathrooms are the rooms that home buyers are most interested in. They're the rooms that buyers are going to take the closest look at. You're putting most of your renovation budget into the kitchen and the bathrooms because they're going to sell your property.

Why Remodeling These Rooms Is Expensive

Much of the money goes toward materials and finishes. Architectural Digest estimated the cost of materials and finishes represents at least 50 percent of the budget for a typical kitchen remodel. Renovations that require electrical upgrades or changing the plumbing layout increase costs.

The Rest of the House Doesn't Need as Much Attention

You may be thinking that no one will buy the property if you don't spend much on renovating the rest of the house. The other rooms do need to be clean, clutter-free, and freshly painted in neutral colors. Those improvements are not expensive and they'll appeal to buyers.

Remodeling for Return on Investment

An appropriate remodel takes into account what buyers expect to see in kitchens and bathrooms in the community where the property is located. Meeting those expectations increases the demand for the property. Falling short could result in a property that sits on the market. 

As for the numbers, kitchen and bathroom remodels can provide a significant direct return on investment. For instance, Remodeling magazine's 2020 Cost vs. Value Report indicates a minor kitchen remodel provides a 78 percent return on investment.