High-ROI, Value-Add Renovations for Any Investor (and How Much They'll Cost)

0:00Spend $20,000 on a kitchen and your house is worth 50,000 more. This is the whole game of real estate investing, and I've done it more than 100 times. You buy an undervalued house, you renovate the right things, and the value goes up far more than you spent. The hard part is knowing which fixes actually matter to home appraisers, home buyers, and home renters. So today I'm going to show you which renovations pay you back the most and how to estimate the cost of each one before you buy the house. We'll cover kitchens, bathrooms, and even a few of my favorite hacks that really boost your value for a lot cheaper than you think. I'm trying to make you tens of thousands of dollars in this episode, and all you need to do is watch. Welcome everybody, this is part two of our series on how to estimate rehab costs. Check out part one if you missed it. That's where we covered the very important big five, plumbing electrical HVAC foundation and roof. Those are your big ticket items, so you want to make sure

1:01that you are accounting for those prior to buying the home, so that you can get the home at the right price. But today we're covering the things that you can actually do that put the dollars in your pocket. We are talking value ad investing. This is my bread and butter. This is what I love to do. And this applies to flipping, but it also applies to rental properties. You can add value pretty easily in single family and small multi-family homes if you know what to look for, what it's going to cost, and you know that it's actually going to give you a return. Because there is a lot of renovations and value ad that you can do that don't really add a lot of value. It may look pretty, but it won't always put money in your pocket. So today I'm going to cover where in the home you should focus on adding value. How much it's going to cost you to add said value, and whether it's going to be worth it or not for you to even take on the risk of doing it based on the returns that you could get. All right, since everybody knows that kitchens and bathrooms sell home,

2:02let's start with the kitchen. When I am looking at adding value to a kitchen, first and foremost, I am looking to see is the layout of the kitchen as it sits desirable. Remember, just updating that kitchen is going to add value. But if it's got a decent enough layout, spending the money to rearrange the kitchen completely is not going to bring you much more value than you just renovating in place. So I would not recommend completely changing the layout of a kitchen unless the current layout is very undesirable for the house that you have. So let's go through each one of these individual factors of a kitchen and talk about what it might cost. Starting with the flooring, I typically don't budget flooring in a kitchen separately than flooring for the whole house. When I'm planning a renovation, the flooring that goes in the kitchen gets bundled into my flooring costs for the entire house. But on average, I'm going to put tile and wet spaces and in kitchens, I'm typically trying to use larger tiles to save money.

3:06So think the 12 by 24 inch brick style tiles or I'll do a 12 by 12 inch square tile and I'll mix up the colors to make it a little more modern. But think of a tile floor, probably going to spend anywhere from $1.50 to $3 per square foot for tile. So if you want to understand how much it's going to cost you to put flooring in your kitchen, you just need to measure the square footage of the floor and then multiply that by the cost of your tile and then the cost of the labor. Labor is going to cost anywhere in my neck of the woods between $1.50 and $2.50 per square foot. So if I'm paying $2.50 for tile and I'm paying somebody $2.50 for a labor, that's $5.00 a square foot. If I have a $250 square foot kitchen, $250 times five is about $1,250 for flooring. Next, let's talk about countertops. I am typically only renovating a single family three bed two bath,

4:10maybe smaller, maybe a little bigger home. And on average, in that size home, the average square footage of kitchen countertops space is usually anywhere between 35 to 40 square feet all the way up to about 70 square feet. If you're renovating massive homes, you're going to need to be on the higher side square foot side. If you're renovating smaller homes, you might have a galley kitchen that's a little smaller. Maybe you're at 25 to 35 square feet. A typical price point for countertops, depending on what you get, maybe solid surface, maybe granite, maybe quartz, you can expect to spend anywhere between $25 a square foot all the way up to $40 a square foot. So if you're pricing this, call a countertop company and ask them what do they charge per square foot for an average quartz or what do they charge per square foot for an average granite. If they are charging $30 a square foot and you are installing about 40 square foot of countertop space, well that's just a quick math problem of 30 times 40. That's going to give you about $12

5:13$200 for countertops. And typically that's what I'm spending. I rarely spend more than $2000 on countertops. I rarely spend less than $1000 on countertops in this space. So I can quickly do math when I'm in a house and look at a kitchen and say, oh, this is going to cost me about $1500. The next item to think about and I would encourage you all to consider this one because it is very low cost but can have a big impact, maybe not on the value but on the desirability of the kitchen is to install kitchen back splashes. I love doing fancy more expensive tiles in kitchen back splashes. A typical kitchen back splash may be anywhere between 15 to 25 square feet on up to 35 to 50 square feet depending on where the kitchen is laid out or how it's laid out. But it's not a lot of space. So you can spend more money on a nicer fancier, cooler looking tile and really make your kitchen pop. Now, having a kitchen back splash versus not having a kitchen back splash

6:16isn't going to make your house more or less valuable. But as I said before, it will absolutely make your house more desirable. The more desirable it is, the more people want that house, the more people want that house, the more offers you get the faster you sell your home. Materials wise, you're not talking a lot of money. You can buy a 5, 6, 7, 8, 9, 10 dollar per square foot tile. If you're only installing it on 35 to 45 square feet of space, you're still talking about less than a thousand dollars worth of materials and then the labor to install the tiles, not very expensive either. So for right around a thousand dollars, you can get a very nice kitchen back splash that I think is well worth the investment. All right, next on the list is going to be kitchen cabinets. Now, this is where you're going to spend the majority of your money on your kitchen renovation cabinets are not cheap. You have several options when you're doing cabinets, you've got your generic big box store cabinets where you can go and select the different pieces to fit the layout of your kitchen. You've also got much more higher end options, which you can get

7:21from custom cabinet makers. Those are typically going to be real wood cabinets. They're going to be much more pricey or you could go with something shipped in from overseas, like China to bring in cabinets that are nicer looking maybe and maybe less expensive, but the lead time on getting them can be very long. But cabinets are where you're going to spend a lot of money and I would encourage you. If you're going to go ahead and spend the money on cabinets, don't cheap out and get the cheapest cabinets possible because cheap cabinets look like cheap cabinets and people will see your renovated kitchen and see the cheap cabinets and think if they cheaped out here or else did they cheap out on this renovation in the rest of the house. So if you're going to spend the money, make sure that you spend the money on a decent cabinet. I'm not saying everything has to be real solid wood all the way through, but don't get the particle board cabinets that have like a laminate paper cover over them to make them look like they're not particle board cabinets. Those people spot them from a mile away. If you're just going to ballpark it, I would say between

8:25eight and ten grand is probably where you should ballpark this number for a typical 1500 square foot you know three bed two bath home. But that's not your only option for kitchens remember I said I only put in new cabinets in kitchens if I'm trying to change the layout. If I like the existing layout and the current cabinets are okay what I prefer to do is not to get new cabinets but to get new cabinet doors. I can take the doors off of the current kitchen cabinet boxes if the boxes are in good shape that's great. Oftentimes you can get in there you can just clean those boxes and a lot of the times if you're renovating a home built in the 60s 70s a lot of those cabinets are solid wood cabinet boxes. If you were to replace them you might not get the same quality. So they're good quality a lot of the times and so I like to keep them. I will have them professionally cleaned. I will have the inside of them all painted and then I will get new cabinet doors and I will get

9:28soft clothes hinges. And so to the naked eye people just think it looks like brand new cabinets. That is a much more cost effective option if you're not going to change the layout. The typical cost for new cabinet doors on a standard three bed two bath 1500 square foot house is usually run me anywhere between $1,100 and $2,200. That's going to depend on the size of the cabinet doors whether they're a standard size or something that's custom and what style cabinet door that you have them build. The more intricate the design on the front of the cabinet door the more it's going to cost you. I typically just do a shaker style which means it's usually just a couple pieces of trim and it's a whole lot cheaper. But I would much rather spend two grand to get a brand new kitchen look and feel versus spending five to eight thousand dollars for brand new cabinets that look exactly the same and function the same as the ones that were there previously. All right next on the list is paint. Again, this is pretty easy. I usually include my paint of my kitchen cabinets. In other words, if I'm keeping the existing cabinets and I'm just painting the boxes and the insides,

10:31that's included in the paint quote for the entire house. So just add the square footage of your kitchen into the paint quote and then that will cover painting the cabinets as well. But if you're going to paint them separately or get a separate quote for painting the cabinets, I've spent anywhere between five hundred bucks on up to $1,500 to paint cabinets. It's going to depend on what kind of paint you're using and how big your kitchen is. But it shouldn't be too expensive. And last on the list for kitchen is appliances. Yes, appliances are expensive, but you don't always have to put high end appliances in your kitchen to get more value. So this is where things can get a little tricky because if you are flipping the house, you need to pay attention to your comps. And what appliances are being sold with properties that are similar to yours because you don't want to delivering somebody up house that is missing appliances that they get with other competition that

11:33you have. In my market, it is very rare that when someone flips a house or when someone buys a new house, that it comes with a refrigerator or a new refrigerator. Most renovated properties include appliances that are the dishwasher and it's usually a new one, a stove oven or a cooktop and it's usually a new one. Very rarely are there microwaves. So we're not including those, but we are including vent hoods. But this is very specific to my market. There are some markets where people fully expect a decked out kitchen. They want the fridge. They want the range. They want top of the line. You have to study your comps to know what you're going to spend. But I don't need to lecture to you guys about what appliances cost. You've all probably bought appliances before. On average, I'm spending about five to $700 on a range. I'm spending about three to $400 on a dishwasher and I'm not buying refrigerators and I'm not buying microwaves. But I am putting vent hoods in where this over the

12:37stove. So you've got a vent hood that will duct any smoke out from cooking. Those typically run me about 50 to 80 dollars. If you've been doing the math, we spent about $1,200 on floors, $1,200 on countertops, about $1,000 on a backsplash, $1,500 on cabinet doors, about $1,000 on paint and about $1,000 on appliances. That puts us just shy of $7,000 for a standard cosmetic kitchen renovation. And that's a pretty typical cost. When I'm estimating a rehab or I'm just ballparking a house and walking through it, I'm usually estimating a kitchen renovation at about $10,000. So when you actually put pen to paper, I'm coming in a little under that, but I like to be very conservative on my estimates. All right, that is a standard kitchen renovation. Next on the list is what's it going to cost you to renovate or update a bathroom and we're going to get to that right after the break. I just booked a trip to the coast, the kind where the morning starts slow

13:40and the air smells like salt and citrus. A few days to wander, eat something new every night, and remember why we love to travel in the first place. But while I'm away, an opportunity is available to me that may not immediately come to mind. My place doesn't have to sit empty while I'm gone. I can list it on Airbnb and bring in a little extra cash. And with the Co-host network, I could even hire a local co-host to handle the details. It's a simple and practical way to make use of an asset I already own. Find a co-host on Airbnb.com slash host. A lot of insurance companies compete on one thing, speed. But if you're protecting an investment property worth hundreds of thousands of dollars, should speed really be the priority? Enreg believes strong coverage starts with understanding the property, the risks and the realities of ownership. That's why they don't rush the process. Their policies are designed for real-world claims, not just quick quotes. If you want insurance built to protect your investment when it matters most, visit nr eig.com slash bpllc

14:42and learn more today. You know that thing where you discover a feature you wish your software had? And it turns out it already exists just on a different platform. Like, oh, you want rent payments processed in two days. Rent ready doesn't. Oh, you want to block tenants from making partial payments mid eviction. Rent ready does that too. Oh, you want full accounting and tax ready reports without paying for a second tier. Rent ready does it. And oh, you want tenant screening that doesn't overcharge your applicants. Rent ready also does this. Basically, if you've ever complained out loud about your property management software, Rent ready probably already built the fix. It's $12 a month. You're welcome. Sign up right now for $50 off your first year of rent ready with promo code BP cash. Bigger pockets pro members get it completely free. Sign in through your pro account at rent ready.com slash bigger pockets. That's rent r edi.com slash bigger pockets.

15:42Trying to get started in real estate investing or wholesaling. The hardest part is finding and talking to motivated sellers before everyone else does. That's why new investors are using prop stream. Prop stream gives you access to over 160 million properties nationwide. Plus simple AI tools that help you find better deals faster. Use pre-belt lead lists like pre-for closures, vacant homes, and cash buyers, then let the prop stream intelligence assistant help you analyze properties and estimate opportunities in seconds. And now with prop stream connect, you can do more than just find leads. You can actually contact them. You get free skip tracing, including LLC and corporate context. You can launch dialer campaigns. Use click to dial with AI prompts, automate follow up marketing, and send postcards all from one platform. No experience needed. You'll also get accurate cops built in calculators and step by step training through prop stream academy so you know exactly what to do next. Start your free seven day trial and get 50 free leads

16:47at www.propstream.com slash BP. That's www.prop.com slash BP. What if your rentals could practically run themselves and give you a chance to win $10,000? That's exactly why I'm excited about baselines 10k giveaway. When I first started investing 10 years ago, everything was manual. Rent came into one account, bills went out from another, every transaction had to be tracked. I was constantly moving money between bank accounts and I could never fully switch off. What changed for me was switching to baseline. It's bigger pockets, official banking platform, and with integrated bookkeeping, my rental finances are fully automated. Rent and payouts are deposited into dedicated property accounts. Transactions are automatically categorized and every property's finances stay organized in one place. The biggest difference isn't just the automation, it's the peace of mind. I spend a lot less time managing my rental finances and a lot more time focusing on growing my portfolio and enjoying the life I'm building. That's what banking that runs your rentals looks like.

17:50And right now, there's an extra reason to make the switch. Enter the 10k giveaway, just deposit qualifying rental income into baseline for a chance to win $10,000. Sign up now at baseline.com slash BP. All right, we are back on the bigger pockets podcast. We are on our second episode of our series on how to estimate rehab costs. We covered the big five in the last episode, but in this episode, we're covering value add what actually puts money in your pocket. We just covered renovating kitchens, what it costs and what you should or shouldn't do. And now we're jumping into updating or renovating bathrooms. So what is this going to cost you? We already talked about flooring and how you estimate the flooring in a kitchen. You do the same thing in the bathrooms in bathrooms. I use tile in the wet spaces. We talked about how much that cost before. It's the same cost here. Typically, an average bathroom in a typical three bed to bathroom is going to be anywhere between 40 square

18:55feet to 60 square feet. So call it 50 square feet. And we're spending about $5 on tile for labor and materials five times 50 is going to give you about $250. Maybe add a little more if it's a little bigger, but just for flooring in a bathroom, three to 500 bucks is probably pretty normal unless you have a massive bathroom. Next time I want to cover is the bathroom vanities. Now when you're thinking about bathroom vanities, there's a couple of things I've done both of these options. You can either keep the existing bathroom vanity and you can just update the top, but 90% of the time, I would say that I'm putting a brand new vanity in. And the reason I'm doing that is because you can get vanity is pretty inexpensively. And there's a lot of cool looking more modern, updated bathroom vanities that you can get that doesn't cost you much more than if you just put a top on the existing vanity. I'm typically spending anywhere between 300 and $1,000 on a bathroom vanity. I will rarely

19:59spend more than $1,000 on a bathroom vanity. There are tons of options for you to get decent looking bathroom vanities for under $1,000. You can find them at big box stores. You can find them on online shops, tons of options shop around, know what size you need and don't overspend. You just want it to look good and you want it to fit in that space and look like it belongs there. Next on your list is going to be your bathing area. Now, there's a few options for bathrooms. Some bathrooms are going to have a tub shower combo. Some bathrooms are going to have a stand-alone tub and a stand-alone shower. And some bathrooms are only going to have a standing shower. So when I'm doing a bathroom, I almost always do floor-to-ceiling tiles. So if it's a bathroom with a tub, I'm tiling from the base of the tub all the way to the floor. If I'm tiling a shower, I'm tiling from floor to ceiling. But I am always pricing tile. I am never pricing putting in a plastic

21:04insert. Plastic inserts, in my opinion, just look cheap and mix the property look cheaper and more builder grade. And it is not a ton of money to buy the tile and to pay the labor to have it installed. So I found for value add, it's just a much better option to always go with tile. If you're doing a tub shower combo, then you want to price the tub and the tile differently. A typical price for a tub is going to run you anywhere between 500 to 800 dollars. And then if you're getting that installed with installation, it shouldn't run you more than anywhere between 1500 to 2500 dollars depending on if you've got to move plumbing from one side to the other because tub's drained in different areas. There's some things you have to consider. But for the most part, just like for like, it shouldn't cost you more than $2,000 for a tub to be replaced. All right, so when you're estimating tile for a bathroom, whether a tub's around or a shower,

22:05you have to measure the square footage. Average square footage for this space is going to be around 75 square feet. If it's a bigger shower, you need to go up. But just a typical tub's around if you're tiling from tub to ceiling, consider it about 75 square feet. Materials for that could run you anywhere between $500 to $1,000 depending on the cost of the tile that you want to use. So just take the cost per square foot of the tile, multiply that by 75 square feet, add a little bit extra for the other materials you need like grout. And then you have to consider the labor. So labor for installing tile for tub and showers around. It's a little more expensive than installing tile for floors, especially because floor tiles are usually bigger, whereas shower tiles are probably smaller, especially if you're doing like a shower pan with a smaller like penny tile. So the cost for installing tile for a tub or shower, it may render you anywhere between 10 to 15

23:08dollars per square foot all the way up to like 20 to 30 dollars per square foot. So if you're getting bids, make sure you ask them what their cost per square foot is on the install. Don't just look at their outdoor price and not understand how that number breaks down. So for the sake of this exercise, let's say we're spending about $800 on materials for $7,500 square foot shower and then $20 for labor for $75 square feet. $20 per square foot times $75 is 1500 plus 800 for the tiles. Put you at about $2300 to tile a tub surround or similarly to tile a shower. It's not going to be that much more expensive. You don't have the cost of the tub, but you do have added cost of more tile because now you have to tile all the way to the floor and you have to put a shower drain pan in. All right, next on the list is paint. I think we covered paint and we talked about how to estimate kitchens. It'll be done very similarly here. Just add a cost per square foot for that particular

24:13room and add that to your total. And the very last thing is going to be all your accessories. That's going to be light fixtures, cabinet fixtures, plumbing fixtures for the tub or the shower. Here's how I essentially estimate those. If you bought a new vanity, it should already come with cabinet fixtures. So you're not having to buy those if you bought a new vanity. But if you kept the existing vanity, you may be replacing the old handles with new handles. It's probably going to run you anywhere between 100 bucks and 300 bucks, depending on how fancy you want to get with those cabinet poles. I always pull the old mirror off the wall and I order a new modern framed mirror. You can get a mirror on a big box store or you can get a mirror on an online store for anywhere between 50 to 150 bucks. And then light fixtures. Light fixtures are typically going to run you about 100 bucks per light fixture. So for five, 600 bucks, you can get all the accessories you need.

25:14Even the plumbing fixtures. I get my plumbing fixtures from an online retailer for a sink fixture. I'm spending anywhere between like 20 and 50 bucks. And for a shower fixture, I'm spending anywhere between like 50 and 100 bucks. So putting all the numbers together, you're spending about three to 500 bucks on floors, about a thousand bucks on a vanity, about 2800 bucks to 3000 bucks on a shower or tub. And then about another thousand dollars on lights and fixtures. That brings your total to around $5,000, which is right around where I estimate a bathroom renovation when I'm walking in house. This is a typical cost broken down for you. Now, a couple of other things to consider when you're estimating these is we talked about floors and paint for a lot of these renovations. And I told you when I do this, I actually estimate the paint and the flooring for the house as a whole and not in these individual rooms because there's only going to be one vendor typically two vendors who are doing all of the paint and maybe all of the flooring. So when I'm estimating paint for

26:15the whole house, I'm taking the total square footage of the house and I am multiplying that by what it costs per square foot to do that work in terms of paint. What I am typically estimating for painting the entire house is somewhere between $3.50 a square foot on up to $5.50 a square foot. So that's going to depend on the kind of paint you're going to use and it's going to depend on whether that's going to include the kitchen cabinets and the bathroom cabinets or not. If you're going to do cabinets, then you're going to want to go a little higher than $3.50. Maybe you're somewhere around $5 per square foot. And if you're going to do no cabinets and you're just talking walls, trim, ceilings, doors, then you can stay on the lower end of that cost per square foot. So typical $1500 square foot house at $5.00 a square foot is going to cost you around $7,500 for interior paint. In terms of flooring, I can get a little trickier. I am still going to take the entire square footage of the house because I want to consider all of it in one number, but I may be using different flooring

27:19in different rooms. I told you I like to use tile in the wet room. So I typically put tile in the kitchen, tile in the laundry rooms, tile in the bathrooms. I do LVP in the common areas. So hallways, living rooms typically get some sort of luxury vinyl plank. And on a flip, I do carpet in the bedrooms. All of these flooring are all going to be a different cost per square foot and the labor is even going to be a little different cost per square foot. But I typically blend all that together and use one number to estimate. So my blended cost per square foot for flooring for a flip typically is going to be anywhere around $550 square foot all the way up to $8 to $10 a square foot depending on the level of materials. If I'm doing a higher end flip, it's going to cost more. If I'm doing a lower end flip, it'll cost less. And then I just take the blended cost per square foot and I multiply that by the square footage. So for the sake of this exercise, we'll consider $6.50 a square foot for the total flooring for a 1500 square foot house is going to run me about $10,000

28:24for flooring. So that's how you estimate the entire home. That way you're not having to break that out for each individual room when you're estimating because now you've got one total quote, makes it whole that easier to estimate. It allows you to be quicker when you're estimating and allows you to spot check what you're getting from contractors when you get beds. Okay, so those are your money makers, kitchens and bathrooms. Now you know what to renovate in the kitchens and bathrooms and how much it's going to cost. I want to move on and talk about how to find opportunities within the current roof structure of a home to add value. And I'm going to do that right after the break. I just booked a trip to the coast and I cannot stop thinking about it, waking up early, walking somewhere I've never been, finding a little cafe with no plan except to see what the day brings. A few days to explore, try new restaurants, smell the salt and citrus in the air and remember why we left to travel in the first place. That feeling of being somewhere completely new, that's what keeps me chasing the next trip. But here's what makes it even better. While I'm away,

29:25my place doesn't have to just sit there. I can list my space on Airbnb and bring in a little extra cash while I'm off exploring. And with the co-host network, I don't have to think twice about it. A co-host is a vetted local expert who can handle everything from creating your listing to managing reservations, managing guests and even styling the space. So I get to fully be in the moment on my trip and my places not only taken care of but working for me while I'm gone. Find a co-host at Airbnb.com slash host. Here's the bad news. Almost every move that can still lower your 2026 tax bill expires on December 31st. Bauderanil in November, it has to actually be in service by year end. Bigger pockets real estate is brought to you by mod. Mod prescribes a once or twice daily medophinal drink that can keep you energized, focused and alert throughout the day. Here's the mechanism. Energy drinks with caffeine temporarily broke you didn't see. The chemical that makes you tired. It builds up and when the caffeine wears off, it all crashes down on you at once.

30:26Bauderanil works differently. It engages multiple pathways in your brain, dopamine, nooprenephrine, histamine andorexin to achieve steady energy and alertness for 10 to 12 hours. Bauderanil was invented in the 1970s and since it's been used in the highest performers on the planet, soldiers, pilots and astronauts aboard the space station used Bauderanil in high-stakes situations where full concentration and alertness are paramount. It's now available at mod.com to qualifying patients. Visit mod.com that's m-o-d.com for free consultation and get 10% off your first order plus free shipping with promo code B-P-R-E. That's promo code B-P-R-E at mod.com. See their website for important safety information and we thank mod for sponsoring the pod. Quick note before we dive back in. This episode is brought to you by cash app. I've been using cash app for years to send and receive money. Sometimes I need to pay someone who doesn't take credit cards or if I want to

31:26split a check or just to pay back a friend for a shared cost. Cash app also helps me online shop safely. More investors are thinking about where Bitcoin fits into a broader portfolio. Not as a short-term trade but as long-term exposure to an asset that behaves differently from traditional markets. Cash app makes that kind of Bitcoin strategy more straightforward. You can buy Bitcoin directly in the app, set up recurring purchases or make larger buys when it makes sense for you. And with zero fees and zero spread on automatic purchases like auto invest, roundups and paid in Bitcoin, more of your money goes toward Bitcoin. Download cash app today. Visit our link in bio. Bitcoin services by block ink. See the Bitcoin Disclosures at cash app slash legal slash podcast. An Airbnb deal can look great on paper and still become an expensive mistake. Being B-Calk makes the numbers prove the deal. Use B-B-B-Calk's market map to browse over 10 million Airbnb and VRBL listings, compare cities by revenue and gross yield, spy on top operators,

32:30and build comp sets. See how adding amenities like hot tubs or EV charges can boost your revenue. Enter any address to generate a complete property report. B&B Couch's AI visually analyzes nearby listings to estimate what it could earn and uses local data to estimate what it will cost to run. Find the best market, choose the right comps, and know the return before you buy. Start your seven-day free trial at bnbcalc.com and use code bigger pockets to lock in 20% off for life. Here's the bad news. Almost every move that can still lower your 2026 tax bill expires on December 31st. You bought a rental in November? Well, it actually has to be in service by year-end. Thinking about changing what you pay yourself? That has to run through payroll before the last check. The equipment, the retirement account, the entity change you keep meaning to make. After December 31st, none of it counts for 2026. Here's the good news. There's still time. Gelt is a team of in-house CPAs who handle the

33:32filing, the planning, and the strategy year-round, not just the tax time. They know real estate, depreciation, and entity structure with a platform that streamlines everything for extra clarity. They'll even calculate a Q4 projection so you know exactly will you land this year? No guesswork. Get proactive about your taxes and schedule a complimentary consultation at joingelt.com. That's joingelt.com and mention bigger pockets. We are back on the bigger pockets podcast and we are talking about how to estimate rehabs and specifically on this episode, which is part two of a series on how to estimate rehabs. We are talking about adding value. We've covered bathrooms, we've covered kitchens, and now I want to cover one of my favorite topics, which is how to spot opportunities to add value within the current home under its current roof structure without spending a ton of money. One of the first things I look

34:34for when I am renovating a house is does the house that I'm renovating have space under the current roof structure that is not currently heated and cooled? And if I add heating and cooling to that room, A, can I do it easily? And B, does it increase the desirability of the home? Or will it decrease the desirability of the home? Is there maybe a sunroom that is under the current roof structure that is not heated and cooled? There are a lot of homes that are built in the 50, 60, 70s, and 80s that have sun rooms. Some of those sun rooms are just screened in. Some of those sun rooms are complete actual rooms with drywall and windows, but the spaces are not heated and cooled. It is very inexpensive to heat and cool those spaces if you can just add a run off of the current HVAC system to that room. So sometimes all you have to do is add a little bit of ductwork and event

35:38and now that room is heated and cooled and now you can add the square footage of that room to the heated and cooled square footage of home. And we all know homes are valued based on a cost per square foot. So let's say your home is valued at $225 a square foot. If you add 200 square feet, well now you've added $45,000 in value to your home by just adding some ductwork. Now there's probably some more you may have to do. You may have to obviously do paint and floors in that room. Maybe you have to insulate the walls because they weren't properly insulated as a sunroom. But for less than $5,000, you can typically add heating and cooling, add any other ancillary parts that you need to that room and you can now add that heated and cooled square footage. So I love looking for those opportunities. Another opportunity to look for in a similar vein is can you convert garage space to living space? When I am looking to add value to a rental property, if it has a single

36:44car garage, I typically convert it to living space. Why do I do that? Because the more bedrooms I have, the more rent I can charge. And so if it costs me anywhere between $2,500 and $5,000 to convert a garage to living space, but I get an additional $250 a month of rent, well then that renovation pays for itself after about a year and some change. And then all of that additional new cash flow just goes into my pocket every month. So maybe I didn't add value from the traditional sense of cost per square foot of the home, but I absolutely added money to my pocket because I'm getting increased rent and that renovation pays for itself because I now am able to rent that property for $2 to $300 a month more. All right, so when you were considering converting a garage, here is what to think about and what it may cost you. First and foremost, you need to understand, is your home on a crawl space or is it on a concrete foundation? The easiest conversions for garage space are homes that are on a crawl space, but the garage itself is on a concrete foundation.

37:49This is a very common or popular style. Oftentimes the house will sit up a little higher and then when you walk into the garage, you have to come down a couple of steps because the house is up on a crawl space, but the garage is down on concrete foundation. So what I like to do in that sense is you build up the floor. So you have your contractor build a base and a subfloor and then you can make the current garage level to where the current house is and then it all feels seamless to walk from garage space into house space. That is the easiest way to do that. You're paying for some subfloors and then it's just paying for the cost of the flooring, the cost for any build out. So maybe you're not just raw converting the garage to a big open room, but maybe you're adding a hallway and making part of that garage, maybe a larger room or a primary bathroom, then you're going to have to add some plumbing, but you've got now plenty of space to add plumbing because you built up

38:50from a concrete foundation up to the same level as the house and then you've got all this crawl space area under that garage makes it very inexpensive to add plumbing. So I love doing that. Converting a garage space can run you anywhere from $3,000 all the way up to maybe $10,000, depending on how fancy you're trying to get. If you're adding a bathroom, that cost goes up. Remember we said it's about $5,000 to renovate a bathroom. So you might want to consider you're going to spend about $5,000 to $7,000 for a bathroom. Plus you're going to spend what it's going to cost you to convert the garage space. So now you're talking somewhere between $7,000 and $10,000 for that renovation. But on average, just think 5 to 10 grand if I want to convert this space more if you're doing a bigger space, less if you're doing a smaller space. All right, I've got one more value add option for you to think about. This is going to be pretty unique situation because it depends on the age of the home or the layout of the home that you are renovating. But a lot of homes that were built in the 80s and older

39:55have outdated layouts. And when I say outdated layouts, I mean they have things like formal living rooms and regular living rooms and formal dining rooms and eating kitchen dining rooms. To me, that is opportunity to add a bedroom. Now again, that heated and cooled square footage is already existing in the home. So by converting these spaces, you're not necessarily making the home worth a ton more, but you're absolutely increasing the desire ability because you're modernizing the layout of the home. So I 90% of the time will convert formal living rooms and formal dining rooms to bedrooms or offices. So what all is entailed with doing this? All bedrooms must have a door, a window, and a closet. So if I'm converting a formal living room or formal dining room, typically I don't have to add a window because most formal dining rooms and formal living rooms have an exterior facing wall and should already have a window. But you do oftentimes have to find

41:00a space to add a closet. You can just add a closet along one wall of the room or you can build out maybe like a small corner closet if the room is smaller, but that's just going to be some 2 by 4, some drywall and some paint in order to build that out. It's very inexpensive. If you are going to convert a room and you do not need to add a window, we're talking less than $3,000 typically to convert that room. And you can now get increased rent as a rental or you can increase the saleability or desirability of that home. And I think it's money well spent. Now in the rare situation where you've got to convert one of these rooms and you have to add a window, the cost can go up substantially depending on what type of house it is. But without adding the window, very very inexpensive and absolutely something you should consider. Alright, there you have it. Now you've got all kinds of numbers, the ones that I specifically use for my projects. Make sure you do your own research, labor and materials cost more or less in different parts of the country. So don't just take what

42:04I told you and use that blanket and hope it works for you. Do it a little bit on legwork, use some AI, use some contractor bids, dial in your numbers, build your own spreadsheets and you'll be analyzing renovations in a snap just like that. Thank you for tuning into this episode of the Bigger Pockets Podcast. I appreciate you watching. Hopefully this is valuable for you and we'll see everyone on the next episode. Have you heard that McDonald's spicy chicken McNuggets made with spicy tempura and a blend of aged cayenne are back. Remember to grab a few extra napkins. For a limited time, I'm anticipating McDonald's. You matched on hinge, you're vibing. Then her energy completely changes. What do you do? I'm Raven Smith and I wrote and read a real love story about this exact sitch. Listen to the free audio book now.