When evaluating a potential investment property, knowing what to replace and by how much is a cultivated art form. It takes time and experience to hit that magical number to know what absolutely needs repair or a remodel and when the law of diminishing returns kicks in.

Investing in just a fewflipping real estate properties doesn’t give the average investor enough experience to know the ins and outs of over improvement. For those just starting out, here are a few tips to keep more cash in your pocket once you sell.

Sometimes it’s best not to replace something but to remove the offending issue. Is the carpet old and worn? Either leave it alone or remove it and let the potential buyer imagine what to do with the floors. A “diamond in the rough” needs to look like a diamond in the rough sometimes to buyers who only reinforce the notion of a bargain when obvious upgrades are needed. 

Pay attention to the areas buyers look at the most such as the kitchen and master bath. If new appliances are needed buy middle-of-the-road and don’t try to impress buyers with high end hardware. You won’t get your money back. Take care of the bathrooms but put your money into the master bath. Fix any plumbing issues or outdated items but remember whatever you replace will be deducted from your profits once sold.

Remember the most cost effective improvements are things such as fresh paint, a nice curb appeal and a thorough cleaning. Just a clean environment complimented with the scent of fresh paint is often more appealing than other, more expensive repairs. Don’t feel as if you need to fix everything. Disclose to buyers what needs to be repaired and price the property accordingly. The buyer’s agent will use your information along with an inspection to make a competitive offer.