Real Estate Investing 101: Top 5 Most PROFITABLE Renovations

What's up, you guys? It's Graham here. So, I'm here with this special guest. Some of you may have met him before, but those that haven't should probably meet Kevin. We're gonna be talking about the most profitable renovations that you can be doing. Anytime you renovate a property, this could be whether or not you intend to flip it or you're buying something for a rental. This is probably what's going to end up getting you the highest ROI.

And let's get right into it. I think number one would probably be the kitchen. The kitchen doesn't need to be something that's overly expensive; you don't need to spend $50,000 on a kitchen. But it does make a huge impact and, from what I've experienced, the kitchen is really often the selling point of any home. Whether you're renting it or trying to flip it or sell it, in today's day and age, it's really the central point that everybody goes to in a house—where everybody's hanging out. In the kitchen and what's adjacent to the kitchen? Family room and the dining room. That's the heart of the house. The rest of the stuff can be hidden behind walls. Oftentimes, people focus on redoing the kitchen before even like the master bath because nobody's really looking at the master bath anyway, especially now.

The number one thing a lot of people are doing is really opening up the kitchen, and that's like the easiest thing to do. That's the basic renovation. It's just like, "Let's open up the kitchen." Start with the holy go with the walls. And then number two, I would say would probably be the cabinetry. Now, yeah, and if you're someone like Matt McKeever, your market doesn’t necessarily need brand new cabinetry; you can often just paint the cabinets that are there, and oftentimes, that’s just good enough.

There are some great examples that you can see online where people take old 1967 oak cabinets, and they either spray paint them white. The best color is usually like a Swiss coffee semi-gloss. It's got a little bit of sheen to it and just enough pigment so you can really cover that oak well. Some other people now, they get into these gel stains where they can turn these original cabinets with a little bit of sanding and then a gel stain of gray or dark espresso color. Yeah, people look like they get these custom cabinets, and all they've done is transform the color of old, original cabinets.

Now, they don't have to fix the walls behind them; they don't have to replan the whole kitchen. There's a lot of labor involved in installing the kitchen itself. Yeah, I totally agree—even things as small as little handles like this. Oh my god, it's so easy, and this is something fun to do too! You get to go to Home Depot or really anywhere, and they're like 50 cents to $2 each. It's the easiest thing you can ever do, and you can even do it yourself with a screwdriver.

Oh my gosh! And match the hinges while you're at it. So all of a sudden, take the doors off, lighten up, put new hinges on when you go to reinstall them. Anyway, you're doing the same screwing as well with hinges. Yeah, it is all screw on the $2 hinges and put a nice new one in. Yeah, got to class up the kitchen for very little money. Some people say, "Oh, I've got a house that's worth $80,000. Why would you spend 40 grand on a kitchen remodel?" Which some people do when you can get away spending two, three thousand dollars painting and updating the hardware and look at the kitchen cabinetry, and you get just as far almost.

And one other thing that's really important, I think, are countertops. This is something that often dates a property, and it doesn't need to be very expensive to redo them. I've noticed some imitation countertops, but they're imitation stones or whatever they are—look just as good as the real thing. Like visually, from like a foot away, you can't tell until you actually get up there and touch it, do you realize? Like, wait a second, this isn't real marble.

But the part of it is—doop! I don't even know if that's a word, but people come and go, “Hey, is it stuff?” Like, it could be, I don't know. But some of these things too are more durable. Like marble stains? That's one of the biggest things. Like, you set a wine glass down, and it has like a little wine ring? It's a box! Oh gosh, on granite, all the day you get a seal. It's tough every year. Even a slight quartz is just like—it's— but I think I spent like eight or nine dollars a square foot on that quartz, but it's white and you put anything down on it and it leaves just this nastiness of just the dirt.

And knowing Graham, you got a good deal on that quartz. Sometimes people spend like 50 bucks a foot. Yeah, you know, get the less expensive stuff; nobody cares. Especially because I think both of us always advocate, "Maybe you live in the place forever; turn it into a rental in the future." And why do you want to leave your tenants with some high-end Brazilian marble or Italian granite or quartz? Whatever. Cares? Just been to the local granite yard and get something cheap.

Agreed. Number two, flooring, especially because you're thinking in that long-run mindset that eventually this property is going to be a rental or maybe it's a rental out of the gate. Don't spend so much on flooring. The best kind of flooring you could really get right now is not like hardwood or some expensive porcelain. It’s something that’s easy to install and relatively inexpensive, and that’s what's called luxury vinyl plank. It’s essentially just like laminate or looks like wood, but it’s scratch-resistant and waterproof.

And don't go too cheap on them. Yes, I neither time ended up making this mistake on my first property I ever got. I got this laminate flooring, and I got it because it was on sale at Home Depot from like a dollar twenty-nine down to like 99 cents. Something on sale! But anyway, the floor looked amazing, and it was super cheap to install. I was able to do for like 1,800 square feet for next to nothing.

The problem was that after the first tenant, you would end up like spilling things on the floor, and when it came time for the tent to move out and another new tenant to move in, the floors were kind of like peeling up on the sides, the edges. And you couldn't find replacement little bits for this, and I ended up just redoing the entire place for slightly more expensive laminate flooring. And the hard part is installed? It's the labor. That’s what kills you on the projects.

Look, you could spend two grand on the material, but then you've got the time—the property's not available to be rented. That's costing maybe a hundred bucks a day. And then the fact that people gotta install it? The other thing with this vinyl plank flooring is it's great for pets because there are pets and accidents—all that stuff is waterproof and scratch-resistant. I’m really into that stuff.

And with that too, carpet is one thing that was one mistake I ended up making. This was one of the tripods, I guess the triflex I bought. I ended up doing carpet in the bedrooms because it was at the time a few hundred dollars cheaper per room, and I think we had four rooms that had to go in. And like, you know, so I think I'm like, "Okay, we can save like, you know, $800," so I went carpet. But one of the tenants ended up moving out after a year, and the whole carpet needed to be replaced, and it became more expensive.

So at that point I was just like, "You know what? You gotta put in laminate." And that carpet gets so nasty—you have to go in there with like—I really think love. Yeah, so just go laminate, honestly. Just a decent, good-quality, cheap laminate will make the biggest difference. Especially if it's a rental property, do you need electrical gloves? I do actually. Thanks!

Yeah! Yeah! One, so number three, I would say bathrooms—the third most important thing you should focus on anytime you're looking for a high ROI renovation. A lot of people focus on the bathroom, the powder room, and also the master bathroom are really important. Don't know what a powder room is anymore these days? I do! Comment down below, let us know if you know what a powder room is. Google, “What is powder room?” I'm gonna quickly post the blog, “What is a powder room?” So I get those search results. There we go, but yeah—I know a powder room is just a room for the guests. It's usually the bathroom that just has a toilet and a sink in it. There's no tub, no shower, no bath—just a little side guest bathroom.

But those things are so easy to renovate, and you can usually renovate a bathroom maybe like $3 grand, $4 grand. I think I spent $7 grand on my bathroom, and that was everything—with a new shower, rearranging all of the plumbing, tile, good. Like, it's not that complicated, and often you can buy almost everything you need on sale at Home Depot in terms of vanities. They have whole setups too with just like everything you need.

Diffic it ok for like $400-$500 bucks, or even like less than that. I've seen them. I bought one for like $80! Shut up! I don't know where you get sales at Home Depot. That’s what you want to do. Have sales? You just go on a sale day and get whatever is on the clearance item.

And for rentals, nobody knows—that's a really good takeaway, actually. Is that tenants, they generally didn’t come from a place of being a homeowner or not always, but oftentimes the tenants, they don’t really realize what different qualities are for fixtures and finishes. As long as they look clean, place is gonna rent!

Yeah, I think it’s more about functionality. Function for a rental, Vallot doesn’t necessarily need to be high-end unless the area demands that. Yeah, if you're going in Beverly Hills, do not buy the $80 vanity. You're renting anywhere else—that's true. You know, even in bathrooms, some—a trick that you can do is retiling can be a big portion of that seven thousand dollar budget. Yes. And so now there are companies that will actually come out and they'll do an acrylic coating.

A spray over all of your tiling that you have pre-existing. So what we've done is, on properties that are like getting ready to go up for sale or for rent, we'll take a property that has this 1950s pink tile or like green or have you seen those avocado green tiles? So original tiles, and just mask everything up and spray the tile white acrylic. All of a sudden, everything's white. Looks like it's brand new!

And bonus on top of that, all the grout lines are gone. Another neat addition for toilets is—Lowes started carrying this Kohler toilet seat that has this little LED strip in the back of the actual toilet seat. It lights up the water, and it was forty-nine bucks or something like that. Like, there’s gonna be a link in the description and Amazon affiliate link if you guys want to borrow my link.

Know if you guys want to buy the coolest line of toilet seats ever? I’m gonna find it on Amazon. The link is gonna be in the description; make sure everybody orders that from my channel!

So number four, I would say is really important. Anytime you’re doing a renovation is lighting. And one of the best things you can do, especially if you're buying or renovating like a 60s, 70s, 80s property with a popcorn ceiling, at the same time you scrape that popcorn ceiling, honestly, just put in recessed lighting. It's really one of the best things you can do, and again, it doesn't need to be that expensive. It adds a huge amount of value.

Can lights are awesome! Especially what I recommend is put them on a dimmer as well, and the best thing you could do if LED retrofit kits— they’re super cheap, like 50 bucks! Put in the hundred-watt LED retrofits—which sounds crazy—that hundred-watt equivalent. So for LED, they're only like 14 watts. But anyway, those are the brightest ones you can get, and you want to get the ones that are 2700 K.

27 RK is the color temperature; those are the ones that look warm. Not that cool blue that looks too, you know, doctor's office-y. But anyway, you put those hundred-watt easy—way too bright for normal use—but you put them on a dimmer, so that way people can dim them to sort of a normal comfortable level. But when you go to show that property, it lights up and looks huge.

Yeah! Cheap, easy, do it—totally great! And while we’re on that, scraping the ceilings, if you get the popcorn acoustic ceilings, you know, just scrape them off! And use a respirator when you’re scraping. This? No, you don’t need to do that; you just did a hand. You just get that? Don’t sue me for saying— for joking, we’re making— we’re making jokes here! Sarcasm; this is not financial, not health-related advice!

Alright, number five. I would say is probably landscaping, and this is something I feel like a lot of people overlook because they don’t think on a rental or any sort of flipped landscape really makes that big of a difference. From my experience, it really helps set you apart from everything else just to have something that is aesthetically pleasing. And again, this doesn't need to be something you spend a ton of money doing. Landscape? Just something that is clean and presentable.

And here in Los Angeles, succulents tend to be extremely popular and trendy, and that is extremely easy to maintain because one of the biggest concerns, especially as a landlord, is that your tenant is going to go and ruin and kill your lawn. And that’s a valid concern. There’s most tenants saying, "I don’t care about the grass and I don’t—I don’t want to water the grass, I don’t want it." My water field at time bunk down. Yeah, yeah! This too! Like, the grass dies.

But if you do some low-maintenance landscape between gravel, succulents— something they cannot kill is amazing! And really helps set you apart. It just adds to the character and the curb appeal of the house. Get the perennials. These are the ones that last longer-term; they generally require less watering anyway, and they're Hardy for tenants, which—party tenants is usually Denison on.

I agree! And also mulch! Just you get that little—little wood chippy looking mulch with weed bear with Weaver. You combine the two, and that just creates magic. It’s super easy to maintain, and tenants cannot mess that up.

So that was five tips so far, but I think we’re just gonna keep going for the few extra bonus tips. For those that have watched all the way through, you get the advantage of the bonus tips! I would say an extra bonus tip would be mouldings. Yes, especially around doors and windows. It's when you're replacing the floor, usually you put a new base.

Something that's really in right now is a four-inch MDF Craftsman style baseboard. Just Google that! Four-inch Craftsman style baseboard. It’s very, very sleek and simple. The other trick you can do now as well is carry that molding up around door trims and windows. Really, frame those windows since it’s so inexpensive to buy this mold.

And you're usually looking at 50 to 70 cents a foot, and then it just gets nailed on after it's painted. It’s really not that hard; it makes a huge difference. The thing to know as well is cosmetic additions for a tenant, you have to be careful. You don’t want to go crazy over-improving for a tenant, but giving a tenant something that makes their property feel a little bit more homey and custom, like some inexpensive molding, can actually help when it comes time for that lease renewal.

And they start shopping around, seeing what else is available and then comparing the properties that maybe don’t have the new hinges and doorknobs or poles in the kitchen or the flooring or this trim molding, which is all overall relatively inexpensive—that $80 vanity and whatever. But maybe it's just enough to help them stay an extra year because turnover is expensive.

I totally agree! You shouldn’t button the very bottom button. Now on a vest! And I thought that was only for a suit. No, no! Yeah, a little bottom one? Barely out? I don't know; I'm gonna have to look that up! Comment below! Let us know on a suit that is not double-breasted. You leave the bottom button open!

I think we both agree on that, yeah? Strap on a vest though? You shouldn’t button the bottom button! I’m 90% sure. I’ve never looked it up at all. Let’s find out down below! And if you watch to the end, we’re gonna reveal whether or not that's actually the case!

So, as always, you guys, thank you so much for watching! I really appreciate it. And make sure you guys check out that light-up toilet seat—a link in the description, as is also Meet Kevin's channel link in the description. But before you check out his channel, check out the toilet seat! I'll find the best one on Amazon!

Also, if you're watching all the way through and you haven’t subscribed yet, make sure to gently tap the subscribe button because the problem? Kevin subscribed! And I’ll show you what happened to his phone! It's not looking pretty!

Yeah, so that happened when you smash the subscribe button! So instead just gently tap the subscribe button! Also, feel free to add us on Instagram. I think we pretty much posted there daily. So, if you want to be a part of it, all the links are in the description. Thank you again for watching, and until next time. [Music]