Back in the late 1970s when I was a Realtor in Houston, I got involved in flipping properties with some friends. Over the years I've been involved in many property renovations and have learned what to do, what not to do, what kind of properties to buy, when to do the work myself and when to hire someone else, and how to get the biggest bang for the buck from renovations.

That's why I like reading the Cost vs. Value survey that Remodeling magazine and Realtor magazine have been doing for many years. This year's survey just came out, with these being the Top 10 remodeling projects that have the greatest chance of recouping the most money

1. Siding - 80-87%
2. Wood deck - 82%
3. Kitchen remodel - 76-80%
4. Window replacement - 76-79%

Interestingly, the article in Realtor magazine breaks down various costs and recouped costs for various parts of the country, something that I had not seen them do before. What puzzles me, though, is that they have basement remodels for San Diego costing $71,800 and recouping $66,000, or 92%. The reason why I find this puzzling is because out of the thousands of inspections I've done in San Diego, I've only found one basement, and it definitely had not been remodeled. I guess I would have liked to have seen how many remodels they were basing these figures on.

Here's some of my recommendations for recouping the most money from your efforts in flipping or renovating a property:

1. Paint - This is very easy for just about anyone to do, and first-time renovators should go for a condo renovation that just needs some paint and maybe some new carpet. People love the smell and look of fresh paint, and I've found that for every dollar I spend on paint, I can recoup 100% providing I do the painting myself (i.e., include some "sweat equity.")
2. Landscaping - This can also be very easy for anyone to do, but poor plant choices will be noticed by a knowledgeable home inspector and could cause a buyer to cancel the transaction, especially if they are looking at living in the home for many years and raising a family there.
3. Kitchen appliances - It pays to visit open houses throughout the neighborhood to see what the neighborhood is like. You don't want to "over renovate" for the neighborhood. I never recommend buying high-end appliances except in the must upscale, high-end neighborhoods. The reason is because it really doesn't matter whether the refrigerator costs $5,000 or $500, they both have a one-year warranty. Same thing with cook tops, ranges, range hoods, microwave hoods, dishwashers, etc. If everyone else in the neighborhood has Sub-Zero refrigerators, one will have to meet that level in order to compete when selling.
4. Doors and windows - Because doors and windows get used quite often, it's not hard to get a good return on the investment. The problem here is that installing new doors and windows can be labor intensive, and it's that labor cost that is difficult to recoup.

Here's things to skip, because you'll never recoup anywhere near what you pay: 

1. Roof - Here in San Diego, when a property renovator finds a house with a wood roof, he doesn't even bother stopping to look at anything else. We live in a high fire hazard area, and wood roofs are taboo.
2. Electric panel and wiring - If you find an old electric panel with fuses, or brands like Federal Pacific Electric, Zinsco, Sylvania, and Bulldog, my professional opinion is that they need to be replaced, and they usually indicate that the wiring and electric outlets might be old, outdated, dangerous, and a latent fire hazard.
3. Plumbing - Cast iron sewer pies, galvanized water pipes, and polybutylene water pipes indicate old and problematic systems that need to be replaced.

Generally, if you can see it and use it on a regular basis (doors, windows, kitchen, decks, landscaping), you'll get more money back from renovating. If it's "out of sight, out of mind," it's difficult to recoup much of the cost. If you can do it yourself, such as painting, you'll get a greater return. If you have to hire someone to do the labor, returns are lower.

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Some of Russel's other blog entries

1. 12 reasons why I won't comment on your blogs
2. How a Seller can cancel the purchase contract during the home inspection
3. What do you do when the listing agent is, uh, blind maybe?
4. What do you do when deceit is obvious? (chapter two)
5. The garage is not a playground.
6. Need to vent? Feel free to vent (your attic) here.
7. That just ain't the way we do it out here, Sonny Boy
8. Not responsible for advice not taken
9. Sometimes it's just a question of semantics and definitions
10. A true real estate nightmare affecting hundreds of people
11. If the shower head isn't working, just turn up the water pressure
12. I purposefully burned a bridge yesterday
13. What part of that don't you understand? (Reading 101, English 101, & Spanish 101)
14. Out of sight, out of mind, skip the work, charge for it
15. "How much will it cost?" "$399 plus a $100 aggravation surcharge."
16. In a home inspection, if the thing works, the thing works
17. What do you do when deceit is obvious?
18. Sometimes it really is that simple (electric again)
19. Sometimes it really is that simple (attic)
20. Did you put that on the disclosure form? "Oh, we forgot."