The Dos and Don'ts of Upgrades


When it comes to the option of the house, the primary question is an investor should be asking. House, relative to the actual cost. Obviously, Taj Mahal is a land of tract homes. Despite the urge to go all the way to the tee, please resist the temptation. Doing so will only cut down on your return. This is particularly important given the fact that since it is an investment, it is not prudent to put some of the potential gain at risk by purchasing unnecessary design upgrades that are not critical.

More often than not, homebuilders are aware of this vulnerability. This is more than ever true for investors, for whom they will provide a glut of options and upgrades that are grossly marked up. This type of financial operation provides an income stream that is essential to many homebuilders, such as KB Home, who are notorious for their exuberant cost upgrades and options. KB Home Studio and rivals that of most high-end design centers. KB Home has a separate business unit with senior vice presidents, AVPs, regional heads, etc., to take care of this organizational monster. The great thing about this device is that it offers a plethora of design upgrades and options that are really top-shelf.

To relate a story, the first time I went through a KB Home Studio, it was baptism by fire. I spent over eight hours in the design center, split over two days. At $ 35,000 more in upgrades, I estimated that it cost me about $ 4,300 an hour to shop in their design center. You can see why I was happy to get out of there. Keep in mind also, that you may be required to pay a fraction of the upgrade costs in the form of a deposit soon after selection. This is almost a certainty and industry standard. On average, the deposit amounts runs 25 percent to 50 percent and is usually nonrefundable.

In spite of the latter, you can see a pure convenience factor, It's hard not to like that a homebuilder can offer you lots of options. Having the "convenience factor" available is all good and well; However, it becomes somewhat of an entrapment issue when the builder offers a plain vanilla box without any or few upgrades. In these cases, the builders will only go to "code" -meaning, only providing what is necessary to have the local housing department or building and safety, at the city or the county level Occupancy. This for instance, in the front or back, unfinished garages, which uniquely definitely consist of drywall with a coat of primer, or an unfinished garage consisting of the latter but with exposed 2×4 studs, sheetrock, chicken wire And black installation coversheet. Other more obvious "standards" include all vinyl flooring and small 4×4 white tile for the kitchen countertops, or cheap laminate for that matter. To top it all off, in terms of complete ugly-fication, you might get the builders' special quarter-inch clustered marble countertops in the

Highlight these amenities, and that's because they're cheap and nobody really want them. Consequently, many homebuilders offer the standards in order to eek out as much money as possible out of each home they build. As a result, a new homeowner and / or investor is essentially forced into buying options and various upgrades in order to avoid the home looking like a plain Jane. Having too much of a plain Jane can actually hurt a home's value. As an investor, it's up to you to define the balance without overspending on a new tract flip. That's the nature of making a business decision: you have to use your judgment. I have seen some homes that were literally destroyed from the inside out of the extreme lack of appeal that permeated the house as a result of no upgrades. As an example, spending an additional $ 4,000 to $ 6,000 on upgraded floor and kitchen countertops is probably well advised. Most carpeting, even if it does not have stain guard, should be suitable for most homes. Do not be pressured into upgrading into a thicker padding for the carpet. Just go with the standard one-quarter inch, since most builders will try to get an extra $ 700 to $ 1,200, if not more, the cost of the house just for upgraded padding.


Source by D Sidney Potter

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