Real estate investors, especially those just getting into the industry, are always on the lookout for the next project. Diamonds-in-the-rough can be found with some diligent research and detective 

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work. Many times such properties are found in established neighborhoods and are in a run-down shape and needs some cosmetic work and perhaps extensive repairs. But for those who are looking for the best “bang for the buck” making repairs and upgrades, some provide better returns than others. What upgrades provide the greatest return on the investment? Typically, the lower the cost of the upgrade, the better return.

For example, adding to and upgrading attic insulation is not only cheap but provides a long-term benefit in lower heating and cooling costs. A new garage door or even a so-called “upscale” garage door not only enhances curb appeal but in terms of resale a garage door upgrade will recoup almost all of the cost involved buying and installing a new garage door. Fancy entry doors have the same result. Perhaps the best return on investment is simply a brand new coat of paint throughout the house using the latest color schemes as well as improved lighting fixtures which brighten the home.

What doesn’t provide as much return? In reverse, the projects that cost the most also return the least as it relates to resale. For example, adding a new bathroom will often return less than half of the cost of installation. Instead, investors refurbish existing baths instead of adding on. Adding an outdoor deck is also on the list of additions that provide the least return on investment. Instead, real estate investors should look at projects that provide the greatest impact on the sales price of the home or what can command higher rents.