Rehabs, renovations, and remodels. House flippers use numerous “re” words to describe the work being performed, including many more than these three. Do you know the difference between these terms, or are they completely confusing to you? If you are confused, don’t feel bad, because the people using these terms often do not know the differences either. Unfortunately, the world of real estate has not universally agreed upon definitions, especially in the sales brochure. In fact, people typically use these words as synonyms instead of a method of differentiating the level of work performed on the house. Here is our attempt to remedy the situation.
Let’s start by consulting our old friend Merriam-Webster. The dictionary contains multiple definition entries for each of these words. We singled out the one the was most applicable to real estate.
- restore: to bring back to or put back into a former or original state
- repair: to restore by replacing a part or putting together (fixing) what is torn or broken
- rehabilitate: to restore to a former state (as of efficiency, good management, or solvency)
- renovate: to restore to a former better state (as by cleaning, repairing, or rebuilding)
- remodel: to alter the structure of
We’ve highlighted the key word within each definition. We listed them in order of increasing complexity, with the possible exception of the first two. We placed restore first, because it is used in many of the subsequent definitions. Now let’s look at some examples:
Examples
To repair is to fix something that is broken or not working. Examples include fixing a leak in the roof, replacing a broken window, making kitchen cabinets and appliances functional, or replacing a broken shower head. Repairs make an item functional again but typically do not enhance its aesthetic qualities. Fixing a 30-year old “running” toilet with a new float and stopper means you still end up with a 30-year old toilet.
To restore is to return something to its original state. The prime example in house flipping is the restoration of the original wood floors by sanding them down and applying new stain. Sometimes the front door or an ornate staircase is worthy of restoration. With the exception of very old historic homes, and mostly items made of wood, restoration is seldom used in flipping. It is typically much easier to replace the kitchen cabinets and other items rather than try to restore them.
In house flipping, it is more common to use and hear the word rehab instead of the full word rehabilitate. The rehab of a house means to bring the entire house back to a former state of good condition versus just some of the pieces. It generally implies that carpeting has been replaced, walls have been painted, some plumbing and light fixtures replaced, perhaps new counter tops and a new roof installed. However, a 1980s house that has been fully rehabbed will still look like a 1980s house when you step inside.
To renovate a house is to make it better than it formerly was. Now we are getting somewhere. A kitchen renovation might include replacing the Formica-topped cabinets with new soft-close drawer cabinets and counter tops made of granite or quartz. The appliances, sink, faucets, and lighting will all be new. Renovating a bathroom will likely include removing the old bathtub/shower inserts, adding tiled walls, and replacing the fixtures. The old single pane windows might be upgraded to new double pane ones, the flooring will be new with wood or laminate replacing the carpeting, and new tile replacing the vinyl in wet areas. Air conditioning may be upgraded to a more efficient system (or added if not previously present). Depending on a house’s age, all new plumbing and electrical may be necessary. On the exterior, old wood or vinyl siding may be replaced with cement board siding and the brick painted. In short, a fully renovated house is now better than when it was new. Although the house may reveal its age by its exterior and surrounding homes, it will look new and defy its age on the inside.
To remodel is to alter the structure by changing the floor-plan or putting on an addition. Adding a second (or third) bathroom to a house is a typical homeowner remodel, as is converting a garage or carport to living space. Putting an addition on the house, or adding a second story to a ranch style-home, are more extensive examples. Knocking down walls to create an open-concept living-dining-kitchen area is a popular type of remodel these days. Exterior remodeling may include adding a gabled front porch, adding dormers, enclosing a carport, or changing the facade. Sometimes, the changes to the floor plan are significant enough that a former occupant or owner will not recognize it as being the same house.
The “T” Word — Transform
At Bowport, we try to do all of the above when flipping a house. We call it a transformation. We attempt to change the floor plan with an open-concept layout, enlarge or create a master suite, add bathrooms and mudrooms, and increase the amount of heated and cooled space. This typically includes all new electrical, plumbing, windows, flooring, cabinetry, fixtures, and roofing. A complete top-to-bottom renovation and remodel can truly transform a decades old home into a new and modern offering.
There are countless other “re” words used in the real estate business, including useful ones like refinance. However, there are others that tend to add even more confusion to the equation. We suggest you restrain yourself and resist using words like refurbish, rejuvenate, refinish, refresh, rebuild, renew, reconfigure, and rearrange unless providing additional detail. If you are thinking about buying a renovated house, it would be wise to get the details on exactly what has been done. Do not accept a one-word description.
Updated — The Most Useless Word in Real Estate
Although not one of the “re” words, the word updated gets our vote as one of the most ill-defined and misused words in real estate marketing. There are countless examples of houses for sale where the advertisement claims it has an updated kitchen. What does that mean? The simple answer is, it could mean anything. We recently bought a house, built in the early 1970s, where the listing touted an updated kitchen. When we got inside, we found a kitchen with its original pine cabinets, early-American style hardware, and original white appliances. Sometime in the mid-1990s (by our estimation), the owner replaced the counter tops with granite ones and covered the old vinyl flooring with new vinyl. Perhaps the owner made additional updates at the time. However, we think we made our point — a kitchen updated 25 years ago is no longer updated.
In addition to irrelevant time periods, there are many examples where the word updated is used to describe of vastly different levels of work. We’ve seen where painting the cabinets or the old paneling made a room “updated” in the listing. As fashion trends change, the mere act of swapping out the carpeting and changing the color of the walls from beige to gray can make a room “updated” in some ads. While these changes do help to improve a home, once again it’s important to not accept the word on face value — get the details.
Be sure to visit our Flip Dictionary to find the meanings of words and terms used in house flipping and real estate.
