And of course, while we're destroying our peace of mind, why not redo the laundry room and pantry too? I'm not complaining much about those—they're relatively cheap upgrades. As we always tell our house-flipping clients, the small rooms matter.

 

But it all stresses the hell out of me. I don't even meet the contractor when he's here (Lori handles that). Lori also pays the invoices. My renovation attachment style is definitely anxious-avoidant.

 

Plot twist: We're not just renovating our house. We're simultaneously building two ADUs at rental properties we own. Each costs $250k and will rent for around $4,000/month.

 

This math I can stomach.

 

 

I like ADUs infinitely more than home improvement because we'll get our money back in five years—a clean 20% ROI. Plus, one of them will boost the building's income enough for a refi, finally letting me escape an 8.5% loan that adjusted post-COVID when I couldn't refinance due to low rental income.

 

But generally? I hate renovating apartments, too. In commercial real estate, it's called “value add,” which sounds fancy until you realize what it actually means.

 

When you see an email advertising a run-down apartment as an "exceptional value-add opportunity," here's the translation: The previous owner didn't fix anything for 20 years, never raised rent, and now you get to spend 6 figures bringing everything up to code.

 

Hard pass.

 

I've always said the reason I avoid "value add" deals is simple: You can buy one building and value-add it, or you can buy two buildings.

 

Guess which strategy wins after 20 years? Renovations age fast. Faster than they used to. The money spent redoing apartments and handling deferred maintenance is a down payment on another building.

 

And here’s a great X thread on why that makes sense.

 

 

I feel the same way about “value add” as I do home renovation. Most of us would be better off keeping the old kitchen and buying a duplex with that money. Or just putting it in an index fund.

 

Want to hear something wild? Americans spend half a trillion dollars annually on home renovation. That's 5% of GDP.

 

Think about that for a second. In the US, one out of every 20 dollars goes toward ripping out each other's tile after houses change hands.

 

We're essentially a nation of people undoing each other's design choices and calling it "improvement."

 

       -Brock

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