Increase The Value Of Your Home With This Trick

Increase The Value Of Your Home With This Trick

Hey, what’s up? My name is Kris Krohn.
I’ve transacted thousands of homes as an investor. And today, I want to talk about
a particular trick that I use in increasing the value of a home. In fact,
I’ve got multiple that I’m going to share with you. And there’s some
misperceptions that I’m definitely going to clean up. So, check it out. How do you increase the value of a home,
right? I mean that’s the question that we’re talking about today. And today, I’m
going to jump in and share a number of things. Because there’s a lot of
confusion on what increases value and what doesn’t. And people will waste loads of
money on things that actually don’t matter. In fact, I remember I was walking
through one of my houses. And I was surprised with all the money that we
were putting in that we weren’t getting nice or fixtures. We weren’t upgrading to
granite. And when I asked my team, I’m like, “Why aren’t we fixing up this whole
nicer?” They said, “Well Kris. All the other cops, the comparables. All the other homes
in this area we’re fixing it up to that level.” Let’s talk about why that’s
important. I actually am going to give you a little test with today’s training.
And I need you to first of all understand there’s a difference between
actual value and perceived value. And if you clicked on this video, it’s because
you really want to understand how do you increase actual value? Let’s talk about
the difference between actual and perceived. And then I’ve given you some
examples. I’m going to test you and see if you can figure it out. First of all,
actual value means the home is worth $300,000 and then I do this thing and
now, it’s worth 350 thousand dollars. That’s actual value
increase. Perceived value is I have the 300,000-dollar house, I
dumped this money into it and now, the house is worth $300,000. What!? It’s a little bit wild and crazy. But that’s actually the way it
works in real estate. So, let me show you.. You’re going to actually catch on I think
pretty quickly. But first of all, let’s talk about a 3-bedroom versus a
two-bedroom home. Because there’s people out there that have a two-bedroom home
and they could convert a garage or do a little remodel or they could convert an
extra room that was a den into a bedroom. I want you to understand that if you
don’t change the size of the house but find a way to go from 2 bedrooms to
3 bedrooms, there’s usually a 20 or 30 or 40 percent increase in
value just by going from one bedrooms to 2.
I mean it’s crazy. If you get with the realtor and say, “Hey, tell me according to
all of the stats and the CMA, the comparable market analysis, what happens
if I add a bedroom?” And the analysis will add only $1,000. That’s
true for going from like a 4 to 5-bedroom home. But 2 to 3 is
money. This is condo versus family in thinking. So, the actual value is
increased if you add a bedroom. Is this true if you go from 3 to 4
bedrooms? Very minor. 4 to 5 bedrooms, almost doesn’t even matter.
Going from 2 to 3, it’s a huge jump. Not perceive value, actual value. Okay.
Kitchen remodel, right? You have this house and you’re like, we’re going to
freaking like… Dude, my kitchen in the background there, it is dope. It’s
probably got $30,000 of appliances. All stainless steel. Top-of-the-line. You know,
we’ve got down cultured marble. And I mean, it’s a beautiful kitchen. 1 inch
thick drawers. The nicest kitchen I’ve ever had in my life. If I were to trade
that kitchen out for Formica countertops and like squeaky old dingy cupboards,
would the value of the home go down? The value of the home my friend would
actually not decrease at all. The perceived value would go down. It might
sell slower. It might sit on the market longer or I might have to decrease the
price from what it’s worth to actually get someone to buy it because they’re
thinking, “I need to do a remodel on this.” But I want you to understand that this
affects perception. And perception affects how long something sits on a
market. So, before I show you these other 3. Like for just a moment, think about
this. You have a property, you’re listing it on the market. It should be fixed up
to the caliber of all of the other homes in the surrounding area just like it. If
everyone’s got granite, you need granite. What happens if your home is not fixed
up to the level of the average of everyone else? Your home will take longer
to sell. If your home is fixed superior to the others, you won’t fetch a better
price, it will sell faster. Because the bottom line is a 30,000-dollar
kitchen remodel does not make your home worth $30,000 more. It’s
still just a kitchen. That makes sense? Look at this one. Increase the size of
the home. Like literally turning part of the garage into living space. You
understand in the next 5 years that self-driving cars will be everywhere.
Right? The world’s going to change. And as that happens, there will be service
is out there. I believe I follow some futurists. And they basically say, “You
won’t even need cars anymore?” What will end up happening is you’ll have a
service. And basically, the car will come when you need it to come. You don’t even
need to house it. Imagine leasing a car that would drive
itself off at night go to some cheap garage. And what would you do then with
your garage space? I believe in the next 10 years, garages, many of them are going
to get converted into livable space. This will increase the value of a home. But
increasing the size of home, does that actually increase the actual versus
perceived value? It actually increases the actual value. More square footage of
livable space drives the value up. Now, you do need to be aware that there is
above ground and there is below ground square footage. So, for example, if you
have a house that has basement that is unfinished, if you finish it, it will
increase the value of a home. However, below ground usually means non-walkout
basement, smaller windows. Not a lot of… People value a basement less than the
upstairs. So, it’s not all equal but it still will affect the overall value. Alright. What about this one? When I first got in the game of real estate,
I remember that one of my mentors said, “Kris, you got to drive around. You got to
look for houses that have tall weeds.” And I’m like, “Why?” He says, “It’s a sign that
someone… If they’re not taking care of the yard, they’re not taking care of the
house.” And if they’re not taking care of the house, that means that they don’t
have time or money. If they don’t have time or money,
they’re probably in trouble. You could get a good deal on that house. And I did
in fact get my hands on an a fantastic deal on a house where it’s like, literally the
weeds were like 3 feet tall. Now, I went in and I paid someone to get a weed
whacker and mow that lawn down. Did the value of the home increase by increasing
the curb uphill? By making the yard nicer? The answer is no. All it did was
change the perception of the value of the house. Because someone’s going to say,
“This yard has problems. That doesn’t change the value. But I don’t want to buy
it.” Or “I would have to love the house for a special reason to want to buy it. So,
I’ve got that juxtaposition between actual versus perceived.” So, what I’m
telling you is that if you take your yard and you’re like, “No, no, no.
Kris, I’m going to put in like waterfalls. And like water
features. And then we’re going to put in like this background like kids area. And
then we’re going to do this thing over here and climbing wall.” Dude, I don’t care
if you put a half a million dollars into your backyard. Your house will not be
worth a half a million dollars more. You will not get that out of it. All you’ll
do is change the perception. So, if on paper, the bank gives you an appraisal
and says, “That houses worth $300,000” and you’re like, “Wait! I put a half a million
dollars into my yard.” They’re not going to say, “Well, 300,000 plus a half a million,
your house is now worth 800,00.” You know what they’ll say? You’re
stupid. The house is still worth $300,000 but I bet you
it’ll sell like this. Because the perception of the value is going to be
so high. That click? Does that make sense? One more. My roof is leaking and I
need to replace my roof. If I replace my roof or if I have an old roof, will that
drive the value of my home up or down? Friends, it is perception. Its negotiation.
These problems that we’re talking about can lower the perceived value and hence
people want to pay you less. But from what the house is worth, putting extra
money in cannot drive the value of that home higher. That makes sense?
So, if the home in ideal condition is worth 300,000. Then if you
put in granite and you put in a gold toilet and you put in money into the
yard, it’s not going to go up from that 300,000. However, if you
let it dilapidate and have problems and don’t fix it up, people will want a
bargain. All we’re really talking about is the difference between “How do I get
my home to its highest level of value?” Or “If I do go from a 2-bedroom to a 3-bedroom?” Or “If I increase the size, then I can actually increase the actual value?”
Those are really the only 2 things that you can do to drive a higher actual
value. Everything else is perception. So, by the way, when I buy a house and I rent
it for a number of years and it’s time to sell it… Because I’ve got thousands,
when it’s time to sell that house, do I actually like dump a ton of money in
there? No. I do an analysis and I say, “What is happening in the market right now?”
Well, homes in the market are not using granite. They’re using Formica. In
fact, it’s this very strong buyers market so homes aren’t
even fixed up all that nice. I’m going to fix up my house to the level of what
everything else is selling for. And if you put more money in than that, you can
do a calculation. You can say, “Well, if I do my bare minimum, replace paint and you
know do paint and carpet, I can increase my selling price by $10,000.
But it only cost me 3,000 to do that. So, I’ll make 7 grand more.” That
makes sense. But if we go all out nuts on a remodel and do this and do this and do
this increase all this perceived value, we put 30 grand in and you know what
we’re going to be able to sell the house for? 7 grand more. So, I’m going to lose
$23,000. That is the big thing that I wanted you to get
out of today’s value is just understanding that there’s a game here
in real estate. And there’s some things that matter and there’s some things that
don’t. Most consumers have no idea. They’re dumping money into a property
thinking, “Oh, yeah. Man, I’m going to get this money out of here. This is going to make my
house way more valuable.” In most instance, it is. All you’re really doing is
affecting perception. You’re going to get it to sell faster but you’re not going to… You
cannot make a house sell for more than the value of a home which is really
locked in. By bedrooms, bathrooms and square footage. Hey, thank you so much for
watching today’s video. I hope it was educational in helping you become more
of a real estate Jedi. A maverick that’s out there able to go out and freaking
crush it in the world. For those who they’re looking it was like, “Wow, Kris. I
would love to actually learn how to actually make money on real estate.” I’ve
got a copy of my book for free. Just click the link below. Cover shipping I’ll
send that out to you. Otherwise, I’ve got a video coming up right now that is
going to share with you how I became financially free at the age of 26 with
the knowledge I shared with you today. Click that video. Check it out. Get my
book. Engage and we’ll see you on tomorrow’s video.

16 thoughts on “Increase The Value Of Your Home With This Trick

  1. Feeling honored to be first comment, so I think you actually might see. Thank you honestly you were my main pushed to make up my mind and become a real estate expert!!

  2. I love this Video! It’s going to help me buy and eventually sell my future home! Your an Inspirer! I love feeling motivated and being self motivated!

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