Planning Renovations
At this point, you should have a clear idea of your house’s potential value and your renovation goals, if you used the methods I suggested in the previous article. The next steps involve identifying deficiencies, determining the repairs, outlining the order and scope of work, and executing efficiently.
Identifying deficiencies
In this article, when we refer to deficiencies, we are talking about parts of the house that are less than ideal. These may be non essential features, barely functional components, or cosmetic issues. A deficiency can also be a required functional repair, but the term is used more broadly to describe any shortcoming of a house when compared to its peers. Examples of deficiencies include:
- A door that sticks
- A noisy bath fan
- Damaged walls and ceilings
- A stained bathtub
- Flooring that is worn or separating
- Damaged cabinets and countertops
- Loose outlets
- A very old furnace
Every house has deficiencies, even homes at the top end of the market. The only way to avoid buying a house with deficiencies is to build a new one, and even then it is not guaranteed. The point of saying this is to make clear that you do not have to fix every deficiency the house has. It is important to note that any work you do should be done properly and to code, within reason. You are not required to bring the entire house up to modern code. Doing so would likely cost more than building a new house. Older homes sell for less than new construction for a reason, and none of the comparable houses in your area will be perfect. No older house will be 100% up to code.
Functional Defects
The top priority is always making the functional repairs. Anything that doesn’t function properly is essentially worthless to the market. In extreme cases, a completely dysfunctional house may be valued only for its land, partially reduced by demolition costs. Any essential part of your house lacking functional use must be repaired to capture any ROI.
When a house has multiple dysfunctional aspects, no single issue takes priority on its own. Repairs often need to follow a logical order of operations, so they will be addressed according to that. Examples of functional defects include:
- Broken furnace
- Deteriorated foundation or excessive shifting beyond an acceptable tolerance
- Missing or contaminated walls and ceilings
- Unusable kitchens or bathrooms
- Roofs, siding, or flashings that leak
- Nonfunctional wells or septic systems
- Missing or nonfunctional electrical
- Leaking plumbing
- Framing with excessive rot or damage
- Broken windows or exterior doors
- Unsafe stairs, interior or exterior
- Flooded basement
Identifying and addressing functional defects is critical to achieving the greatest increase in value. In many cases, fixing only the functional issues may provide the highest ROI. However, it can be efficient to combine functional repairs with other deficiencies like cosmetic or optional upgrades when working in the same area of the house. For example:
- If your furnace is broken, you could replace it and install central air at the same time, often reducing costs by 20–30% compared to performing the projects separately.
- If drywall in a living area is damaged beyond repair, and the room has limited lighting or outlets, it’s easier and more cost effective to address both of these improvements while the walls are open rather than doing them separately.
This strategic approach allows you to maximize ROI while minimizing unnecessary cost and effort.
Determining Repairs
Once you’ve identified the essential repairs, you will need to decide which deficiencies should be prioritized. The most effective strategy for maximizing value is to focus on the worst features of the house and bring them up to standard. In theory, these features have the least intrinsic value and therefore offer the greatest potential return when improved. They say kitchens and bathrooms sell houses, but the reality is that a lack of problems is what sells a house. Whenever possible, you need to remove any reason for someone to dislike the property. If the floor is noticeably sagging, it will be a problem. If the bedrooms smell like cat urine, it will turn away buyers. Your focus should be on fixing the worst problems, not improving things that aren’t problems.
Let’s assume that all things are equally problematic, which does happen, especially with full scope projects. The list below shows, in order, which changeable features matter most to buyers:
- Conditions of the walls and ceilings: This includes wall patching, repairs, and paint. Damage, staining, mold, markings, and bad paint jobs make a house feel old and worn out. Clean, freshly painted walls have a strong psychological effect because they touch every area of the house and are seen more than anything else.
- Flooring: New flooring is the second most impactful improvement you can make across the entire house. Old flooring can hold odors, look dirty, and feel weak underfoot. If you do nothing else, flooring and paint capture the most value.
- Kitchens: A new, functional kitchen with modern amenities is a major selling point. Most buyers understand that the kitchen is the most expensive room to remodel, so not needing to address it wins immediate favor.
- Bathrooms: While less important than the kitchen, bathrooms still matter. A clean, functional bathroom is essential for healthy living. The number of bathrooms is also important. Buyers in smaller or lower priced homes may be more forgiving, but full family homes generally expect at least two.
- Layout: While there are limits to how much you can change the layout, you should still be opportunistic. Partial or full open concepts, adjusting or adding doorways, or converting space into bedrooms should all be evaluated on a case by case basis with proper cost analysis. Often you can make small layout improvements at low cost if you are working in the space anyway. There is a strong case for placing this higher on the list because layout is very important to buyers. However, since you are limited in how much you can realistically change, I felt it was appropriate to move it further down.
- Finishing basement space: Although finishing a basement does appeal to buyers and adding usable square footage has value, there are factors to weigh before deciding if it’s worth doing. Appraisers value below grade square footage differently than above grade space, so the extra finish work must justify the return. Basement finishing tends to matter more when the home is on the smaller side and the added space is more meaningful. In some cases, simply having a finishable basement is enough to attract buyers. You can let them take on the cost and sell at a lower price, which often evens out, especially with larger homes.
- Exterior Finishes: This plays into the “keeping up with the Joneses” mentality. Not every buyer is overly focused on curb appeal, but for some it matters a lot. This does not include basic landscaping, which does almost nothing for market value. Exterior finishes and cosmetic upgrades are usually a low priority item because they can be expensive, have limited functional use, and add less value than comparable interior projects. When exterior work does get done, it’s typically out of necessity, when a functional system fails and has to be replaced. The functional aspects of the exterior are vastly more important than exterior cosmetics. Remember, you cannot do any optional work until the functional defects are repaired. The functional aspects of the exterior still trump everything on this list, especially the roof.
- MEP (mechanical, electrical, plumbing): Most buyers overlook this category, but inspectors, appraisers, and the buyer’s dad will not. The philosophy here is simple: if it isn’t broken, don’t fix it, aside from improvements like adding central air when appropriate.
- Garages and outbuildings: These usually sell themselves based on their potential. The key is ensuring they are functional. You don’t need to invest in defining this space when someone likely has their own ideas for how to use it.
- Decks and exterior living spaces: These are typically the least important features. Most buyers expect to make their own improvements and personalizations here. Focus only on repairing or improving existing features when it is cost effective. The exception is when the property’s value is heavily tied to outdoor space, such as a deck overlooking a lake, or a fence that creates privacy in an otherwise crowded neighborhood. Otherwise, most of the value outside the home comes from elements you can’t change, like the parcel itself.
Part 2 of this book will go into all these categories in much greater detail, but this list serves as a quick reference for you to prioritize and outline your repairs.
Order of Operations
You need to complete projects in a logical order, or you’ll end up with unnecessary problems and inefficiency. If you’re living in the home while doing the work, your approach will naturally be different. You may need to tackle projects room by room, shifting your belongings around so daily life can continue. If you have two bathrooms, you’ll typically finish one completely before starting the other, so you always have a usable bathroom. The biggest challenge usually comes when it’s time to renovate the kitchen. You may need a temporary setup to serve as a kitchen while the actual kitchen space is out of commission. Renovating one room or area at a time can work, as long as you’re willing to tolerate the inconvenience and slower pace.
For most projects, there’s a standard order of operations. Certain steps may shift depending on your chosen finishes, but the overall flow usually looks like this:
- Cleanout and demolition: Out with the old before you in with the new.
- Dry-in: Make sure the building envelope is watertight before any interior work starts.
- Structural repairs and framing: Typically completed from the ground up.
- Plumbing: This comes first among the major systems because waste lines depend on gravity and plumbing codes leave little room for improvisation. This is also when tubs and surrounds are set.
- HVAC: Ductwork is large and awkward, so it’s easier to run before electrical wiring goes in. The equipment itself can be installed anytime. I prefer to keep vents sealed until drywall is finished, though heating may be needed to help the compound dry.
- Electrical: Wiring is the most flexible system to route around obstacles, so it’s best left until after plumbing and HVAC.
- Insulation: The final step before closing up the walls.
- Drywall: Hang, repair, and finish to prepare for interior work.
- Prime and paint: I prefer to do all the painting at this stage and to do touch ups at the very end.
- Electrical finish: Once walls are painted, you can install switches, outlets, and fixtures. Wait to do the kitchen outlets until after the backsplash is installed.
- Wall mounted fixtures: Shelving, closet systems, and other wall attached items can go in anytime after paint.
- Kitchen cabinets: From here, the kitchen becomes its own sequence. Cabinets first, then countertop templating and installation, followed by the sink, backsplash, appliances, and any over range components.
- Floors, doors, and trim: The order depends on the flooring material. With LVP, I prefer flooring first, then doors and trim, I’ve never had an issue with damage. For carpet, trim is typically installed first and held slightly off the floor so the carpet can be tucked cleanly underneath.
- Bathrooms and all other floor set fixtures: After the floors are in, you can set toilets, vanities with legs, appliances, and anything else that sits directly on the finished floor.
Exterior finish work can be completed at any point after the functional components are installed. The timing usually comes down to contractor availability, the season, and the weather. Renovations don’t always unfold in perfect order, so you’ll sometimes need to shift steps to keep progress moving. That’s fine, as long as you’re not creating major inefficiencies. You don’t want to be fishing wire through finished walls when you could have run it while everything was open. Build your sequence around the specific repairs you’re planning. This is where a lot of people get themselves into trouble, resulting in expensive mistakes.
Scope of work
Now that you’ve determined the necessary repairs and the order in which you’ll tackle them, you can define the scope of work. How far you take each project depends entirely on your local market. For example, if your kitchen needs an update to stay competitive but you’re in a lower priced market, you might meet buyer expectations simply by refinishing the cabinets and installing a new countertop. Likewise, you don’t need to replace a tub and surround if they’re still in good shape. If your goal is to maximize ROI, stay conservative. Every dollar you save by reusing existing finishes is a dollar you can reallocate to an area that actually needs it. It’s easy to feel like this approach is “being cheap”, and it is, but the market doesn’t care what you spend. It only cares about what you produce.
An essential part of setting your scope is recognizing the point where repairing stops making sense and a full replacement becomes the smarter move. This is a critical skill to develop. You can’t rely solely on a contractor’s opinion, because they may have a vested interest in expanding the job. Many contractors also prefer working from a blank slate simply because it’s easier or familiar to them. That’s fine if you trust them, but understand that doing so can cost you money.
Here are two real examples experienced that show both sides of the decision:
Example 1:
A worker needs to remove more than 50% of the subfloor to replace rotted joists. Patching the remaining areas to match the existing 1″ oak subfloor would be tedious, and inconsistent. Instead, the worker chooses to install all new joists and subfloor. The materials cost more, but the labor is roughly the same, and the finished floor installation later will go faster and smoother because the substrate is perfectly flat.
Example 2:
Instead of gutting all the drywall, the worker keeps the 10% of the existing drywall. Only the areas that are still in fairly good shape, maybe a wall here, a ceiling there. Saving 10% of the drywall on a $15,000 drywall job can save $1,500, minus some light patchwork.
With heavier renovations, a significant part of your scope won’t be fully defined until the demolition process. As you open things up, you’ll uncover hidden deficiencies and gain a clearer understanding of the ones you already knew about. It’s important to know that your scope will need to be flexible. The demolition chapter in Part 2 explains how to approach demolition in a way that maximizes efficiency and sets up the rest of the project for success.
Executing Efficiently
These are some basic best practices for executing the renovation process efficiently.
Tracking spend
I recommend using a spreadsheet to track every dollar you spend. If you’re doing the work yourself, it’s also helpful to track the time you invest. I organize my sheet by category, and within each one I log material costs, subcontractor costs, and labor hours. Each line includes the budget I assigned for that specific task and an auto calculated total investment. I also include a column showing how far over or under budget I am. This system has been invaluable for improving my cost estimating accuracy.
Collecting Estimates
When you subcontract work, it’s crucial to get at least three estimates. For anything over $1,000, I aim for three to five. This is non negotiable, you need to do this, no matter how inconvenient or uncomfortable it feels, or you will lose money. Some trades can quote from photos, but many jobs require an in person visit. When requesting an estimate, be very clear about what you want done, and explain your exact goals. Let the contractor know you’re collecting multiple estimates so they understand they need to submit their most competitive price. If you choose another contractor, it’s courteous to notify the others. Something as simple as:
“I’m just reaching out to let you know I went with another bid, but I appreciate your time and will reach out for future projects.”
Most professionals appreciate this message, largely because most people never send it. I get more thank yous from that text than anything else. If someone reacts poorly to such a polite notice, you’ve just filtered out a personality you don’t want to work with anyway. Over time, repeating this process builds a reliable roster of fairly priced contractors you can prioritize on future projects. It takes time to develop, but the more hands off you want to be, the more valuable this network becomes. Always start each project by thanking your contractor for being there.
In most cases, it’s best not to pay a contractor upfront. If a contractor requests a deposit, politely decline and explain that you pay only upon completion, on the agreed date. You can offer to sign a contract giving the contractor the right to lien your property if you fail to pay. This gives the contractor a means of recourse that they cannot offer in return, assuming you need to sell or refinance later. Paying a deposit locks you into the contractor’s schedule instead of your own, which can be risky if they get busy and delay your project. The only exceptions are covering permit costs or providing upfront payment for materials with a contractor you already trust. Otherwise, you offer to pay for materials directly and take delivery yourself. This is how I handle projects, and I’ve never had issues. I always have the check in hand the day work is completed. Waiting to pay is unprofessional and disrespectful to contractors, and respect should go both ways.
Material Discounts
You have to find ways to get materials at a discount. The impact on your margins will be significant. This begins with a disciplined mindset: don’t choose premium items when reasonably priced substitutes will do the job. Look specifically at items for sale first. Try to buy appliances as package deals. Stores like Habitat for Humanity can be a good source of low cost building materials, and you may occasionally find big ticket items on Facebook Marketplace for a good deal. Another great source for individual or specialty items at a discount is Amazon. If you need specialty tools that you may not use heavily, Harbor Freight offers cheaper brands than will often do the job at least a few times before breaking. I even use Temu, specifically for throw away oscillator blades. There are many avenues to explore if you are willing to put in the effort.
Most of your savings, however, will come from placing bulk orders with suppliers. Some specialty suppliers can offer better prices, especially for things like plumbing and flooring, but most cannot compete with the big box stores. Before you begin your project, create pro accounts at Home Depot and Lowe’s. They often have sign up promotions for their credit cards, which can also help. The most effective strategy is to put together a large order and submit it to the pro desk for an additional discount. These usually require at least a couple thousand dollars to qualify, which is easy to reach for multiple stages of a major renovation. Recently, I’ve had more success with the Lowe’s pro desk, often getting an extra ten to fifteen percent off on top of standard volume discounts. Check both and compare, even pit them against each other whenever you can. There’s also a major efficiency benefit when you can assemble a comprehensive list from multiple categories and have everything delivered to your job site. Big box stores make returns simple, so you don’t need to worry about overordering if you’re unsure.
The right tools for the job
If you plan to do the work yourself, you’ll work much more efficiently with the proper tools. It may require some upfront investment, but most tools pay for themselves quickly. The exact tools you’ll need depend on the jobs you take on, but I’ve put together a couple of general lists to get you started.
Basic hand tools:
- Tape measure
- Finish hammer (18-22 oz)
- Sledge hammer
- Mallet
- Flat pry bar
- Longer pry bar
- Utility knife
- Chisels
- Nail punch
- Speed square
- Framing square
- T square
- Levels, torpedo (6 inch), 2-4ft, and 6ft
- Lineman’s pliers
- Crescent wrenches
- Channel lock pliers
- Soft jawed pliers
- Needle nose pliers
- Vice grips
- Pipe wrench
- Wire strippers
- Chalk line
- Screw driver with multiple bit types
- Trowels
- Lifting straps
- Ladders
Necessary power tools
- Impact driver
- Power drill
- Circular saw
- Miter saw
- Table saw
- Reciprocating saw
- Angle grinder
- Oscillating multitool
- Jig saw
- Trim nailer (16 or 18 gauge)
- Framing nailer
- Orbital or sheet sander
- Non contact voltage tester
Additional recommended tools
- Hammer drill
- Laser level
- Pex crimpers
- Mixing drill
- Router
- Belt sander
- Shop vac
- Tile saw
- Drywall lift
- Chainsaw
- Standing lights
- Folding tables and saw horses
- Dehumidifier/fans/heaters
- Laser distance measurer
I don’t recommend any specific brand because the reality is they all break. Focus on finding good deals. If you’re using battery powered tools (which I recommend), it makes sense to stick to one brand since the batteries can cost as much as the tools themselves. I’m transitioning from DeWalt to Milwaukee because DeWalt has denied too many warranty claims for me to continue buying their tools. There’s nothing wrong with using cheaper brands either. For corded tools, I usually just buy whatever is cheap or on sale. I spend $500-$2,000 on tools during the course of a whole house renovation.
Moving forward
You should now have a solid understanding of the basics for completing a renovation and be able to create an effective plan to see it through. Always be learning and asking questions. No one, including myself, is an expert in every aspect of home renovation. Most people specialize in one area, but you need a general understanding of everything. The more you learn from those around you, the better prepared you’ll be for future projects. Mistakes are inevitable, houses are complex, but focus on correcting what matters and learning to do better next time.