There's a fine line in real estate investing between keeping your property updated and modern while still balancing the cost of these renovations. Sometimes the improvements are not much of an option, like when appliances are broken, the roof is going, or the property was previously home to someone who smoked. But other improvements are totally optional.
It can be challenging to determine whether the cost offers enough value, whether directly or indirectly, to make the project worthwhile and still preserve your profit margin. Creating an open floor plan certainly fits into the latter category. Most modern homes typically have an open floor plan, but creating the open-floor-plan design in an existing home can be costly. Whether you're considering a rehab-and-flip or updating a rental property, deciding whether to create an open floor plan will make a big difference to your bottom line.
What is an open floor plan?
An open floor plan is a floor plan that merges two normally distinct rooms into one large space. A common example would be removing walls between a kitchen and dining room or living room, but it can technically even refer to offices, dens, or other rooms in a house. You will sometimes see an open concept created utilizing half walls, but more often than not it means completely removing the walls. An open floor plan creates a more bright and airy atmosphere while creating a more social space for entertaining, watching the kids, or chatting with your spouse while you cook. It can also be a great way to create the appearance of more space in a home -- so if your property is smaller, this could be a great fit for you. With nearly three quarters of home buyers preferring an open floor plan, it's certainly something to consider.
How much does an open floor plan cost?
An open floor plan involves removing walls, repairing the floor and ceiling in that location, and potentially shifting around things like cabinets, appliances, or closets, depending on the wall removed. The cost to remove a wall isn't too expensive for a single-story home. It can be as little as $300 for a non-load-bearing wall and up to $3,000 for a load-bearing wall. Prices increase significantly for multi-story homes and can cost up to $10,000. Patching ceilings usually runs around $50-$75 a square foot. Floors vary greatly but will typically cost between $200 and $800 for a repair. But keep in mind, that's if you have the matching flooring available. If you don't, you could find yourself in a position of having to redo all of the flooring in that room. And don't forget the costs associated with new cabinets if the new open layout can't go without.
Is it worth the cost?
If you were already planning on extensive remodeling, like a brand new kitchen or flooring, it may not be a bad idea to open things up for a small amount extra, especially considering the demand is there. But if repairs were minimal or you're considering the project solely to create an open floor plan, it may not be worth the money spent. It ultimately comes down to the budget for the project in comparison to other projects and the use of the property to determine if it's worth it or not.