If you’re not watching, you should.
The premise of the show is easy. Young couple buy a duplex. Young couple make bad decisions. Young couple call HGTV for help.
Enter the dashing Scott McGillivray. He flashes his million dollar smile, and sprays mace into the drooling wife’s face.
On his entry, he examines the couples rental unit. Typically these places are disaster zones. The term “Cruel and unusual” punishment seems to apply. After taking a tour and seeing all kinds of gross things (mold, dead birds, crack pipe) we’re treated to a Monty Hall “Let’s make a deal” style show.
Scott presents two scenarios. One is always labeled “The Lipstick Job”. Typically cosmetic, the changes promise to lift the value slightly and get the place rentable. Option two is the Uber-renovation. Jaw-dropping, incredible, holy cow I-won-the-lottery cool. It involves a complete gutting of the rental unit but the results are nothing short of heaven on earth.
Then the couple gets to choose: The Lipstick job or the Uber-Reno job.
It never ceases to amaze me how people pick the Lipstick Job. Their reasons typically make no sense. One young couple buys a 3-story house with basement. Scott gives them the lipstick option and the uber-option. Uber-option results will product rent that will make their mortgage payment or make them able to take over mortgage payments. Imagine that! Living mortgage-free in a duplex!
Nope. The couple opts for the lipstick renovation. Why? They need five bedrooms. What for? Their dog and two cats? Well, they probably aren’t serious real estate investors.
There are a few things you can pick up from the show.
When buying a duplex, always renovate the rental unit first. The mortgage payment is going to come whether you have a renter or not. Doesn’t it make sense to have a tenant to help out immediately?
When doing a renovation, go with hardw0od or tile flooring. To put some numbers to this: let’s say it costs $800 to install carpet but $1200 to install tile. Most people pick carpet because it’s cheaper. Well, carpet has about a 3 year lifespan. Hardwood/tile floors have about 15 year life span. Carpet you’ll be replacing; hardwood/tile floors you won’t.
Every renovation decision needs to be dictated by the ROI. Why spend $20,000 on a renovation if it’s only going to raise rents by $10/month?
So check it out! You can even be on the show.