Most everyone agrees that home improvements add value both for the present owners and for when it becomes time to sell. However, not all home improvements are created equal. The trick of course is to dedicate dollars to areas that will offer the best return on your investment. Do not expect a dollar-for-dollar return, either. Individual and stylized upgrades may be appealing as a homeowner. We each like to carve out our own space and personalize it. Trendy improvements lead to “unique” living spaces that are harder to market when it’s time to sell. Finding the right balance between the aesthetic and the useful is a fine art.
The National Association of the Remodeling Industry says it saw an increase in requests for bids, conversion of bids to jobs and value of jobs in the final three months of 2012 and into 2013. Good news for home renovators: After six years of decline, the amount of money you’re likely to recoup on remodeling projects is finally on the rise. The average return on home improvements is 60.6 percent, which is an improvement over the past few years. Choosing an improvement to help sell a home should include recovering the highest amount of your original investment.
Surveys done by remodeling magazines, home sales websites, Sherwin Williams and various other sources, in conjunction with data collected from NAR (National Association of Realtors), and NARI (National Association of the Remodeling Industry), show that there are many choices in valuable renovations and remodels. Deciding which project to do and how much to spend really depends on your situation. If your goal is to increase the value of your home for resale, your project should reflect the neighborhood and follow sales trends. Speaking to an expert is usually an important first step.
Topping most lists is replacing exterior siding. It may not be a “sexy” update; – however, in the reality of numbers, dollars spent on siding, according to NAR, can boast a return of about 79.3 percent. Along these same lines, replacing an entry door can recoup the majority of investment dollars. Replacing windows can be a functional update that may not be so noticeable visually, but are much appreciated for improving energy efficiency. Basement remodels can be one of the most cost efficient renovations. Many remodels now include creating an “in-law” suite, guest or additional bedrooms, or even a separate rentable area. These renovations bring immediate returns through rental income.
Have you ever noticed everyone gravitates toward the kitchen during a dinner party? It’s known as the heart of the house for a good reason. The draw of your kitchen to party-goers has the same value to potential buyers, so a kitchen remodel or update is another good way to add value to your house.
Painting is one of the least expensive ways to freshen and improve your home’s look, and consequently its value. A coat of paint can do wonders to brighten up dingy cupboards, for example, or old paneling. Neutral colors are seen as the best way to create a fresh, bright and versatile look. If a home doesn’t look appealing from the outside, chances are a potential buyer will never make it inside. If the exterior color of your house is dated or fading, painting is a good place to start your improvements. Replacing a garage door, adding or renovating a deck, and bathroom updates also top the lists of worthwhile home improvements.
In uncertain times, with the economy, the job market and even the stock market, there’s no place like “home sweet home.” Even though the housing bubble did burst, homeowners can still recoup a significant percent of their money spent on home improvements. The key is to know where and how much to spend. Just because you put $20,000 into renovations, doesn’t mean it will necessarily add that much value. If your home needs a new roof, you won’t see a return on those dollars for a while because people expect the roof in a house they’re buying to be in good shape. The same can be said for your plumbing and electrical systems. Bad plumbing will detract from the value, but new plumbing won’t necessarily drive up the price tag. When the necessities are all in working order, then it’s time to do a few of the niceties. The key to adding value is to focus on the things that are important to buyers, and to not over-improve.