RE: Real Estate Podcast

Ben Harang, REALTOR® (00:00)
you might have a space where you could put a gas range or incorporate a barbecue pit without

costing you whole lot. it would give you an attraction and, maybe increase the pool of buyers.

Hello everybody. Welcome to another episode of the RE: Real Estate Podcast I'm Ben Harang and with me is my cohost Clint Galliano. Good morning, Clint. How you doing today?

Clint C. Galliano, REALTOR® (00:46)
I'm doing wonderful, Ben. How you doing?

Ben Harang, REALTOR® (00:49)
I'm doing terrific today though. The weather is wonderful. We had a little cool spell. Let's warm it up a little bit. No rain today. Life is good. Life is good. So what are we talking about today?

Clint C. Galliano, REALTOR® (01:01)
All right, so today we're going to be talking about South Louisiana ROI. And so everybody does upgrades and some upgrades are beneficial to you as the owner. Some upgrades are beneficial to your to the investment in your home. You know, they'll actually give you a return on your investment. So we're to kind of skim through

some investments that are good and some investments that you might get benefit out of it but they won't necessarily add to the top of your price when you go to sell. So ultimately,

Ben Harang, REALTOR® (01:38)
Mm-hmm

Clint C. Galliano, REALTOR® (01:40)
You know, they might spend $50,000 on a renovation or putting a pool in or something like that, but they're not going to get that much added to the value of the home.

Ben Harang, REALTOR® (01:50)
Yeah,

I tell people the best way to get a house with a pool is to buy one with a pool. A lot of people put in pools, but it certainly does not give you a good return on that investment if that's all you're looking for. It's a matter of how much the utilization is worth to you. So that's just one of them.

Clint C. Galliano, REALTOR® (02:10)
Yes

indeed. we're, ultimately we're talking about smart money and what's beneficial. And so kind of same like Ben said, know, is it beneficial to you? Is it worth it to you? You know, this isn't about, know, we kind of last few episodes we've talked about.

How what you see on TV in the national market isn't reflected in our local market. And so this is more of it. ROI on a home isn't just about new kitchen. Insurance plays a part for some of it. Desirability plays another. Actually, it's probably the biggest.

The two biggest things are desirability on the market and functionality. And those are the two biggest things that play a part on if you'll get a return on an investment of an upgrade. So these are the things we're going to cover. okay.

Ben Harang, REALTOR® (03:08)
I have a question for you, Clint.

If I want to sell my house and I have a 20-year-old roof and we have the roof conversation and I say, well, Clint, my roof isn't leaking. It's good. I don't need to change it. I don't need to change it until it starts leaking. Should or should not that roof be changed before selling that house?

Clint C. Galliano, REALTOR® (03:15)
All right.

So that's a calculation that you as the seller needs to take on. So here are the facts behind it. From a value appraisal point of view, if there's a functional roof in place, that's all that matters for value. So as long as the roof is functional,

Ben Harang, REALTOR® (03:38)
Mm-hmm.

Clint C. Galliano, REALTOR® (03:54)
then that's not going to affect the value. You put in a new roof, it's not going to affect the value. It might give a couple of thousand dollars of additional value depending on how old the original roof was, you know, and you maybe get opinions of value before and after. But where it will impact you is your buyer pool.

Ben Harang, REALTOR® (04:04)
Mm-hmm.

Clint C. Galliano, REALTOR® (04:18)
because if a buyer's looking at buying the home, you might be able to replace that roof for $15,000, which is probably, I'd say, a typical price to replace a roof in our market, depending on the size of the house and all that fun stuff. ⁓ But...

Ben Harang, REALTOR® (04:25)
Mm-hmm.

Mm-hmm.

Clint C. Galliano, REALTOR® (04:38)
If a buyer comes in and they're looking at a 20 year old roof and knowing that they're going to have trouble getting insurance because a lot of the larger carriers won't write a policy on houses with roofs over 10 years old in our market and the ones that do charge more, then they're going to want to at minimum offer $20,000 less.

Ben Harang, REALTOR® (05:02)
Mm-mm-mm.

Clint C. Galliano, REALTOR® (05:02)
because

they don't know exactly what it costs to replace a roof, they're thinking it's at least $20,000 to replace the roof. So that's something you gotta take into your calculations.

Ben Harang, REALTOR® (05:08)
Right.

You know, on, on, on a roof that's done, what happens is you're not going to get the real value for your house. and you would, would be taking a, the hit at the cost of a roof at least. And I tell people it's always cheaper for you to do it yourself than to discount it to a buyer who is going to always want a bigger credit than what it actually costs. Cause they don't know what it's going to cost. So you're better off doing it yourself.

then given a credit because the credit is typically larger than the cost. So that's just another way to look at the roof.

Clint C. Galliano, REALTOR® (05:47)
that.

Exactly. And along similar lines is HVAC, air conditioning. ⁓ know, air conditioner is present and working, then yeah, it's there. You put in a new one, you may get a slight bump in value. Again, same thing like the roof. But...

Ben Harang, REALTOR® (05:55)
Hmm. Yeah.

Clint C. Galliano, REALTOR® (06:12)
the buyer is going to come in there and their opinion is that we're going to wind up having to replace that ⁓ if not now in the near future so we don't want to pay that much for it. ⁓

Ben Harang, REALTOR® (06:18)
Mm-hmm.

Mm-hmm.

Clint C. Galliano, REALTOR® (06:25)
on the flip side, if you're on the buy side, beware of older HVAC units. So that plays into account also, but if you can update it, you can probably get it done for cheaper. You can find somebody to do it for cheaper than what a buyer will want to discount the offer price to purchase it in its current condition.

Ben Harang, REALTOR® (06:29)
Right, right.

Right.

Mm-hmm. agree So that's that's two big ticket items that that need to be dealt with in reality just because a 20 year old roof is not leaking doesn't mean it does not need to be changed and if you have a 15 18 year old AC HVAC unit Chances are when August comes it may or may not survive So that's

That's two things in my mind, you better, you, better spending your money on those things to get your house back up to the market value rather than, gutting a kitchen and spending the same amount of money on a new kitchen. Cause you still have the issue of the roof and HVAC.

Clint C. Galliano, REALTOR® (07:31)
And one more item to add to that pool of general items that it's probably a good idea to take care of is electrical panel. So if your home has a fuse panel or a circuit panel that's made certain models by Federal Pacific, I think Zinsko is another one. Or if the home has cloth wiring,

Ben Harang, REALTOR® (07:53)
Mm-hmm.

Clint C. Galliano, REALTOR® (07:56)
good luck getting insurance on it. You may have insurance now, but the buyers that will be looking at buying it, it will be almost impossible for them to get an insurance policy on it. So for, I guess roughly about $2,000, you can get a panel changed out.

Ben Harang, REALTOR® (07:58)
Yeah.

Clint C. Galliano, REALTOR® (08:17)
you could get some new wiring run. Now if you need the whole house rewired, that's a different discussion. But even so, if you got those old panels or fuse panels, fuse box, that's a fairly cheap solution that will help get the house sold because it makes it so much easier for the buyers to get insurance on it.

Ben Harang, REALTOR® (08:27)
Mm-hmm.

Yes.

And all of these things, if the insurance is driven up, the cost of the buyer's monthly note goes up and you lose potential buyers. And the best way to sell it fast and for top dollar is to increase the pool of buyers that are attracted to the house. you should, you should get

top dollar for the house if everything else is in good shape.

Clint C. Galliano, REALTOR® (09:10)
Yep, definitely. So next thing, we're going to jump on the higher ROI bandwagon. So those are the kind of, there's low return on investment for the items that we just finished talking about, but ultimately they'll help get your house sold.

Ben Harang, REALTOR® (09:20)
Okay.

Clint C. Galliano, REALTOR® (09:32)
Now these next items that we're looking at, these will actually give you a return on investment as long as they're done right. And as long as it's not just lipstick on a pig.

Ben Harang, REALTOR® (09:44)
Okay. All right. So, so once, once you have the house solid and, and sound and good bones, like some people say, the roof is good. The H H vac is good. it's, it's watertight. Then you can get into doing what, what can you do for, a little investment that will actually give you a return on your investment and make the house worth more. the,

New garage doors and steel exit doors, entry doors typically give you a better return than the cost, a more return than the cost. So your ROI would be good. The curb appeal, I can't say much enough about it. We've talked about it before, pressure washing, mulch, put some colorful flowers.

just make the house look as attractive as you can without a renovation as what it looks like from the street as you drive by. That's what curb appeal is. Fresh paint on the exterior, no peeling paint. The doors, those things will absolutely help attract buyers. ⁓

Clint C. Galliano, REALTOR® (10:51)
and we just

had an episode a few episodes back that where we covered that if you increase your curb appeal that typically houses with good curb appeal will increase your selling price by seven percent

Ben Harang, REALTOR® (11:07)
Yeah. Um, so the next one, the next one on the list of just minor kitchen and bath updates. Uh, we're not talking about a $60,000 kitchen gut job. Uh, good luck with that. We talked about painting cabinets, if they're, if they're stained, um, new hardware, changing the countertops, um, changing some, some light fixtures that are dated.

Some things that you can do relatively inexpensively in a grand scheme of things will again attract more buyers, give you a bigger return because the buyers are willing to pay for it rather than seeing everything that needs to be done as with the roof, they will want a discount over and above the actual cost of what those things are. So those you should get your money back plus on.

You know, we have a, a social culture where we are an outdoor kitchen. people love it. I'm not saying go, go spend a hundred thousand dollars on a, on an outdoor kitchen, like some people do, but you might have a space where you could, where you could put a, a gas range with a cooktop in an oven, or incorporate a barbecue pit without

costing you whole lot. it would give you an attraction that somebody without it doesn't have. and, maybe again, increase, increase the pool of buyers. So it's not necessarily a need, but it's something that people seem to want in our culture. you know, whether it's Friday night football, Saturday night football, Sunday football, whatever, whatever the case may be.

they enjoy, enjoy being outside with family and friends. So that's just something that to think about if you have the space, don't do not go create it. but if you have the space, you can, you might be able to drop a couple of appliances in and make it more attractive than it is, than it is without.

Clint C. Galliano, REALTOR® (13:12)
put in a fridge, hang a couple of fans up from the ceiling, put a TV up there and watch football games, have parties and the like.

Ben Harang, REALTOR® (13:17)
Mm-hmm.

Right.

Because we are social animals.

Clint C. Galliano, REALTOR® (13:25)
Yes, indeed. All right, let's move on and cover the money pits. Things to avoid.

This is kind of a quick fire round, we're not gonna dwell too much on it, but we kind of leaked one of them back at the beginning of this episode, is swimming pools. It's a high cost to put them in, it's high insurance, and no pun intended, but it's a small buyer pool. You know, it's a...

Ben Harang, REALTOR® (13:34)
Mm-hmm.

Yeah, a low return.

Some people want a pool, some people do not want a pool, some people don't care if it has a pool or not. So you'd be really limited to the ones that really want a pool. And then this is one. Where's my house? I can do whatever I want in my house. Well, you put a purple paint in a room.

that's not attractive to the audience. That'll, that'll take care of some buyers for you and run them off. you do some,

Clint C. Galliano, REALTOR® (14:17)
bold weird colors,

weird tile, ⁓ all of that stuff is people look at that and go, orange walls.

Ben Harang, REALTOR® (14:20)
Yeah.

Yeah. and,

black and white floor tiles, some people like them. Some people get turned off immediately. and that was the thing back in the day.

Clint C. Galliano, REALTOR® (14:37)
Yeah, and I guess that one would kind of depend on if it fits with the rest of the decor of the house. But if it's like just one room? Yeah. ⁓

Ben Harang, REALTOR® (14:37)
whether you should do that or not.

Right. Right.

Yeah. And then

another one is, you know, if your house is in the $250,000 range, don't go spend $10,000 or $12,000 on a Viking range. It just, it won't fit the neighborhood. It's, it's overkill. if you need to replace the range in the kitchen by a typical moderately priced, nice range. don't

Don't go overboard and price the house out of the subdivision comps to where you have more in it than you can get out of it.

Clint C. Galliano, REALTOR® (15:22)
Yeah, something that, you know, I've, my wife and I kind of struggle with, we like the idea of a wall oven. We've got a plan if we ever decide to pull the trigger to add a wall oven to our kitchen. But we look at the prices and the cheapest wall ovens we can find are $2,000.

Ben Harang, REALTOR® (15:38)
Mm-hmm.

Clint C. Galliano, REALTOR® (15:48)
and we can get a range for way cheaper. That's got the oven and the stove top and while we like the idea, it just from my point of view, it doesn't make financial sense.

Ben Harang, REALTOR® (16:01)
And then you have to put in a cook cooktop beside.

Clint C. Galliano, REALTOR® (16:05)
Yeah, or range. mean, depending on what you're doing. while I'm saying if you. Right, right. You know, well, I say that because my wife likes to bake. And so being able to to do all kinds of baking and say three different ovens would be really appealing. But just the idea of it. I don't I don't think that would fit with again with the neighborhood or the house.

Ben Harang, REALTOR® (16:09)
No, mean, if you put the, yeah, you could, you could put another range and have two ovens. Yeah.

Mm-hmm.

Yeah. and then another one is, is don't go out and start changing the floor plan on your house. You bought the house cause you liked it. you probably liked the floor plan. If you, if you're living in it and, and decide to sell it, there might be something about it. You may have outgrown it. but don't go, don't start a major renovation on the house right before you sell it.

Clint C. Galliano, REALTOR® (16:35)
And then.

Hmm

Ben Harang, REALTOR® (16:54)
You will increase the pool of buyers, you're not going to get your money back the first year or so after you do that. So just be careful about any major changes. the mechanics of the house right. Get it nice, fresh, and clean. And we didn't talk about cleaning, but cleaning just makes all the difference in the world. A deep, deep clean.

You know, and you can do all of these things and then you look around, like I said before, you wonder why you, your second guess, why you want to sell the house. once, once you get everything cleaned up and it's fresh and, a nice, it's like, I might want to stay. That's the time to put your house on the market.

Clint C. Galliano, REALTOR® (17:30)
Yeah. Yeah. Well, I'd say the takeaway is clear.

Ben Harang, REALTOR® (17:30)
What else Clint?

little recap.

Yeah.

Clint C. Galliano, REALTOR® (17:37)
Make sure your bones are Them bones. Make sure it's insurable. You don't have to, but it does increase your buyer pool. focus on low cost, high impact visuals. Paint, curb appeal, and that's the smart money.

Ben Harang, REALTOR® (17:46)
Mm-hmm.

Yes.

Okay. Clean and spend some time on a declutter and depersonalize. We didn't talk about that in the prep, but that's something else that helps. That's my pet peeve.

Clint C. Galliano, REALTOR® (18:06)
3D.

Yep, well, and they're not normally thought of as an ROI investment, but it's definitely an investment in getting your home sold.

Ben Harang, REALTOR® (18:25)
Okay, I think that about wraps it up Clint. I don't think we went too long today. This one might be right on time for a change. So if you get any value out of this, go ahead and like, subscribe, share, comment. You can reach us on rerealestatepodcast.com. Leave a comment. We'll address it in a future podcast.

So if you have any questions and want to talk, Clint and I are certainly available on RE Real Estate Podcast. have our contact RERealEstatePodcast.com. We have our contact information. So reach out to us. We can visit. We can talk on the phone. We can meet face to face, whatever you're comfortable with. And we can have a heart to heart about what needs to be done to get your house on the market and sold. So I think that's about it, Clint.

Clint C. Galliano, REALTOR® (19:12)
another one in the can.

Ben Harang, REALTOR® (19:13)
Yeah. All right. Y'all have a good day. Thanks for watching.

Clint C. Galliano, REALTOR® (19:18)
See y'all later.