Question for those who think they know the real estate market: What would maximize profit on a house flip? A second bathroom or a bigger kitchen?
The details:
A small side-split ranch house in a desirable central location (burlington downtown for those who know the area).
The area is very mature so the houses tend to be old and small, with small rooms.
Has 3 beds but only 1.5 baths (common layout for this particular area, but most houses have added a second bath)…
Standard sized lot for the area , house is in good condition, no major repairs necessary.
The girlfriend says updating the kitchen would bring a greater return, I say adding a second bathroom would.
The kitchen would require knocking out a single wall and rebuilding some counters/cabinets, while the bathroom may require that one of the bedrooms be made a little smaller to fit (also require a wall to be moved).
In terms of construction the cost of a second bath would be greater than a kitchen reno, but I think that it would allow a much greater increase in asking price than a nicer kitchen and would increase the potential client base (most family buyers want at least 2 baths).
Again, the flip would require that we do one or the other (otherwise we loose any potential profit).
So when you say add a second bathroom, would that be in addition to the existing half bath, or a replacement of it?
To me the question hinges on the current state of the kitchen. If it’s an absolute hole, then yeah, I think you’d get more mileage out of redoing it. But why do you have to knock down a wall? Is it that small?
I’d strongly suggest asking some local real estate people.
My own purely anecdotal evidence: 5 years ago, we remodelled the kitchen in our nothing-special townhouse - hardwood floors, better applicances, nearly doubled storage space. A year later we sold it for the second-highest price ever commanded on our block, while another house on the block languished on the market for several weeks (back then, 2 weeks was “languishing”).
The new owner sold a few months ago. Other townhouses on the block were on the market for months. “Our” house sold within a couple of weeks for the highest price ever paid on that street. The kitchen was really the main distinguishing factor.
That said - I could personally live with a so-so kitchen for a while if we had adequate bathroom-age. This is where local experts would be helpful - they could tell you if your so-so kitchen outweighs poor bathroom space.
Oh we are def. asking the real estate people. Have a meeting with them tomorrow as a matter of fact. I just wondered if anyone would venture an opinion.
As far as the property goes it is in Burlington Ontario Canada.
Ideally I would say a whole new bath as an ensuite off the Master Bedroom. But if not possible, then just adding a shower in the half bath.
The existing kitchen is pretty small and dated. I don’t have the figures at work but I’d guess at about 9x10 for the cooking area plus a similar eating area.
The question is what would allow for a greater comparable return. A fancier/bigger kitchen or a second full bath.
Given a smaller older property and that existing appliances are all new.
I’d go with the kitchen. A nice updated kitchen tends to impress people before they explore other areas of the house, and I think it gives you more bang for your buck. I know plenty of families that raised multiple kids in houses with one bathroom so I think most families are more willing to forego an additional bathroom. For entertaining, the kitchen tends to be a pretty central location so an updated kitchen will appeal to more buyers.
All right, I’ll just say kitchen. But your real-estate people should have a better handle on it, particularly if we allow for the vast differences in mentality between Canadian and American homebuyers. An American homebuyer, for example, would consider a hockey rink in the basement to be a definite liability.
A nice new kitchen is great if people come and see it, but a second bathroom lets you put “3 bed / 2 bath” in listings. I’d say that’ll get more hits on searches, etc.
This site provides some useful cost return data for various remodeilling jobs in different regions in the US, but it only has a category for “minor kitchen remodel” within the existing space.
IMHO, if I were looking for a new house, I’d rather see the additional bathroom.