Hi, there! Joe White here from Grow Property Management, your trusted property management company in Philadelphia.
As a property management company, we've been noticing a significant shift in the quality of renovations, and we wanted to share some thoughts on the topic. Recently, around 75-80% of the new properties we manage are either new construction or recently renovated homes. Unfortunately, we’ve seen a trend where these renovations or new builds don’t hold up as well as they should over time, which ends up causing issues for both property owners and tenants.
Let us give you an example. We sometimes manage newly constructed homes where everything seems perfect, but once the first tenant moves in, the property starts to show signs of wear and tear much faster than expected. We do a great job with tenant screening, ensuring we place responsible tenants in these homes. Yet, despite this, the poor quality of materials used in the construction leads to noticeable damage after just a single lease term. It’s not that the tenants are causing excessive damage; it’s more about the subpar materials that aren’t designed to stand up to everyday use. This can lead to significant losses for property owners. We’ve seen homes that cost over a million dollars depreciate by hundreds of thousands in value simply because the flooring or other finishes don’t last.
This problem isn’t just limited to new builds; it’s also common with recently renovated properties. Often, when homes are flipped or renovated, the focus is on making them look good for sale, but not necessarily on ensuring that the renovations will last. The result is that, after a short period, the home starts looking worn out, and the value begins to decline.
From our experience, if you’re a property investor doing renovations, it’s essential to think long-term. Instead of using trendy materials that might look good now but won’t last, it’s smarter to choose classic, durable materials that can stand the test of time. Personally, we stick to things like subway tiles, which have a timeless appeal, rather than something that’s trendy today but will look outdated or wear out quickly. This way, the property will maintain its appeal to tenants and buyers for years to come.
One of the most important things to consider when renovating is the quality of the work. It’s not just about picking the right materials but ensuring that everything is installed properly. A perfect example of poor workmanship can be found in a recent renovation on my block. The property looked fantastic from the outside, with new windows and planters installed, but we noticed that the window boxes were poorly fitted. The builders used cheap vinyl planters, secured to the masonry with drywall screws. Within a few months, the sun will likely cause those planters to deteriorate and collapse. To someone walking by or a potential buyer, the house looks beautiful now, but the poor quality of the work will soon show. The buyer probably won’t realize how quickly those planters will need to be replaced.
If you’re a property investor, especially if you plan to hold onto your properties for the long term, you must invest in high-quality renovations. It’s tempting to cut corners or use cheaper materials, especially if you’re just trying to flip a property quickly. However, in the long run, poor-quality renovations will cost you more in maintenance and could drastically reduce the property’s value. On the other hand, if you take the time to do things right, the property will continue to look good and perform well for years, even after multiple tenants have lived there.
To wrap up, as a Philadelphia-based property management company, we encourage property investors to think carefully about the quality and sustainability of their renovations. Your goal should be to make sure that your property holds up over time, not just in terms of materials but also in the style choices you make. Classic, timeless designs will always appeal to tenants and buyers, while cheap materials or poorly done work will quickly turn a beautiful property into a maintenance nightmare.
Happy real estate investing!
