In property flipping, it’s easy to get caught up in the excitement of adding more square footage to a home, but sometimes bigger isn’t always better. One flipper learned this the hard way when they decided to enclose a porch in an attempt to increase the home’s value. While it seemed like a smart move at the time, this decision ultimately backfired. Here’s why you should think twice before adding square footage to your flip project.
The Misconception About Square Footage Value
A common misconception among flippers is that simply adding square footage will automatically increase a property’s value by a set amount. In this particular case, the flipper believed that by enclosing a porch and adding an additional 100 square feet, they could instantly boost the home’s value by $20,000 (assuming a $200-per-square-foot price point for the neighborhood). Unfortunately, this kind of thinking oversimplifies the true dynamics of real estate valuation.
The truth is that increasing square footage doesn’t always equate to a proportional increase in property value. For example, enclosing a porch might not be as valuable as adding a well-designed room or a functional space. The value of square footage added depends on what the space is used for and how it compares to other homes in the area.
It’s About Comparable Homes, Not Just Square Footage
To truly increase the value of a home, the changes you make need to be comparable to other properties in the neighborhood. In this case, enclosing the porch may not have been a wise decision if the rest of the homes in the area didn’t have similar additions. It’s not just about adding space; it’s about making sure that what you add fits within the expectations of potential buyers and aligns with the neighborhood’s standards.
Think of it like enclosing a garage. While some buyers may see it as a bonus, others might prefer a functional garage for storage or parking. If you convert a garage into a living space, you may reduce the property’s appeal to buyers who value parking space over additional rooms. The key takeaway? Do your research and ensure that the changes you’re making align with what potential buyers are looking for.
Research Is Key Before Making Major Changes
The real lesson here is the importance of due diligence. Before committing to any project that involves adding or modifying square footage, take the time to research local market trends and understand what buyers in your area actually want. Talk to local real estate agents, review comparable sales (comps), and get a clear sense of how the changes you plan to make will impact the home’s value.
If you’re adding square footage, make sure it’s something that buyers in the area would consider a valuable improvement. Adding a new bedroom, extending the kitchen, or finishing a basement might be great ways to add functional space, but simply enclosing a porch might not be the smartest move if it doesn’t fit with local trends.
Flipping properties is all about smart decisions that maximize your return on investment. While it’s tempting to think that adding square footage is a surefire way to increase a home’s value, remember that it’s the quality and functionality of that space that matters most – not just the size.
Take the time to research, plan, and ensure that your investments make sense for the home and the market. The best flips are the ones that add real, desirable value to the property, not just more square footage for the sake of it.
