Any house can be made beautiful, says Lauren Liess, founder and principal designer of Lauren Liess Interiors. The question, she adds, is whether it's a worthwhile investment.
"Even the saddest-feeling house can be amazing if you shove cash at it, but in most cases, once you put the money into a home required to fix it up, you've typically gone up to, or even over, the house's real estate value, which isn't a great position to be in," says Liess. She knows a thing or two from personal experience, Liess, the author of Feels Like Home: Relaxed Interiors for a Meaningful Life, also runs a real estate brokerage in Northern Virginia and Washington, D.C.
So how do experts like Liess put on their renovator glasses to look beyond dated carpet and not-so-appealing paint colors to find the homes that truly have renovation potential—the ones you'll want to live in and that'll also have instant equity?
The most important rule of thumb, Liess says, is to find a for-sale home that's currently undervalued and has some sort of innate charm or architectural character—or can be easily turned into a blank slate so you can add your own architectural details without too much construction and cost.
"Look for houses that haven't been renovated at all—you don't pay for others' renovations—or are out of date and unappealing to most buyers," Liess says. "Unfortunate tile and terrible paint colors are your best friends."
Ahead, Liess and other experts share how to walk through a home like a developer or designer and spot potential in for-sale homes.
What Really Kills a Home's Renovation Potential
Designers and developers tend to know pretty quickly upon looking at a property whether it's worth renovating—sometimes before even stepping inside. "If the home has beautiful architecture and curb appeal, we can get the interior to where it needs to be," says Philip Thomas Vanderford, owner and founder at Studio Thomas James, a Dallas-based interior design firm. But there are red flags that stop them in their tracks. If they see these inside, they recalibrate and consider bailing altogether.
Low Ceilings
Ceiling height can be a dealbreaker because it's difficult to change, Vanderford says.
Structural Problems
An unsound foundation or electrical and plumbing systems that are in bad shape can tack on tons of costs that could eat up your entire renovation budget, Vanderford says.
A Bad Layout
A terrible floor plan is hard to work around. "If too many rooms need rearranging, this can really rack up the budget," Liess says.
Multiple Levels
In general, single-story homes are easier to do extensive remodels on, says Stephen Pallrand, founder of Home Front Build, an architecture, interior design and construction firm in Los Angeles. "An upper story makes moving any walls on the lower stories more costly due to structural concerns," he says.
An Inflated Price Tag
Liess says she overlooks the homes that are already priced over market value because she doesn't like to have more money in a home than it's worth. That's partly why she avoids recently renovated homes—they typically aren't priced low enough. Also, it feels wasteful to undo the work.
What You Can and Should Overlook
Once you rule out nonsensical floor plans, renovated homes, and low ceilings, design experts aren't too easily deterred from outdated homes. Most homebuyers know to look beyond the paint colors and might even ask for a seller's concession to put down some new carpet, but renovators are willing to forgive a lot more.
Windows can be added to too-dark rooms, mold can be remediated, and architectural details will add charm to a plain home, Liess says. Anything that's out of date can be stripped down and timeless elements can be added in, she says.
Pallrand recommends using your imagination to strip the rooms down to their basics: walls, floor, and ceiling. "Ignore any horrible finishes, flooring, or wallpaper, and try to see the room as a blank canvas," he says. "How much natural light does it get? How is the size, the feel, the view?"
Admittedly, this can be a challenging exercise if there's a kitchen with, say, cumbersome vinyl cabinets and dark granite countertops that make the space feel smaller. But visualization is the key. "You are really purchasing a shell which you get to resurface to reflect your personality," Pallrand says.
So, Should You Make an Offer?
If you're starting to get serious about bidding on a home, spend time in it thinking and dreaming, Liess says.
She recommends reworking the floor plan in your head or on paper and writing a list of all the things that need to be done to get it to your liking. From there, make ballpark estimates of all the projects that will need to happen. Add that amount to the price of the home (with some cushion for unexpected costs and overages), and then see if it's in line with the going rate of a newly renovated home in the area, she says.
"If it is, and if you're planning to live in it, the house has value and is worth fixing up for you," she says.
However, if you're planning to flip it to resell, the total cost of the house and renovation needs to be a good amount under the value of a newly renovated house because you need wiggle room in there for profit.
If you're not quite sure what the renovation costs will be or you need help identifying some potential money pits, bring a contractor along with you—they can help you estimate what you'll need to invest more accurately.
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Brittany Anas is a former newspaper reporter (The Denver Post, Boulder Daily Camera) turned freelance writer. Before she struck out on her own, she covered just about every beat—from higher education to crime. Now she writes about food, cocktails, travel, and lifestyle topics for Men’s Journal, House Beautiful, Forbes, Simplemost, Shondaland, Livability, Hearst newspapers, TripSavvy and more. In her free time, she coaches basketball, crashes pools, and loves hanging out with her rude-but-adorable Boston Terrier that never got the memo the breed is nicknamed "America’s gentleman."
