“Home renovations can be a stressful, time-consuming, and expensive process,” according to Laurie March, home improvement and remodeling expert. Having an idea of the return you’ll receive on your investment at sale time is one way of deciding whether or not the project is worth the cost, or it can help you prioritize projects.
General estimates of how much you could get back
In an average residential market, several kinds of projects can recoup more than 80% of the investment for the cost of the job, notes Remodeling Magazine’s “2014 Cost vs. Value Report.” The report details more than two dozen typical renovations in the midrange or upscale category, from replacing doors or windows to adding rooms. For example, if you install upscale fiber-cement siding to your house, expect to recoup up to 87% of the cost of the job, notes the report. You can search the report for trends over time, for regions, or even city-specific data.
Small changes, big results
“In every market, sprucing up your front door has surprisingly good results,” notes March. Put in a new steel door and you can expect to recover 96% of the cost of the investment, according to Remodeling Magazine’s report. “Add in a refresh on your outdoor lighting, doormat, and colorful landscaping, and you can really change how your home is perceived from the street,” she adds.
Remember, home buyers will likely first see your place pictured online, notes Brendon DeSimone, real estate expert and author of Next Generation Real Estate: New Rules for Smarter Home Buying & Faster Selling. “If your home does well in a photo shoot, it will get more people in the door,” he says.
More buyer-minded advice
- “Kitchens and bathrooms sell homes,” says DeSimone. High-impact and higher-cost investments here include new countertops, appliances, and cabinet hardware in the kitchen and new fixtures and grout in the bathroom.
- Be stylish, but not edgy, he advises. White cabinets in the kitchen or hardwood floors in a dining room will hold their value for longer periods of time than the latest fads. Add a fresh coat of paint where it’s needed.
- Keep bedroom changes reversible. “Taking out a bedroom and replacing it with a walk-in closet can sometimes be a huge selling point,” says DeSimone. Turning a bedroom into a home office can also be appealing. Both of these transformations can be undone if a buyer wants to regain the room as a bedroom.
Live in the present
Selling your home might not be in your near-term plans. “While financial data tells half the story, many remodeling decisions stem from personal family circumstances,” says March. Adding a bathroom might only recoup 60% of the investment for the cost of the job, according to RemodelingMagazine’s report. But if the addition could better accommodate your growing family, it might be worthwhile.
The same holds true for other jobs. If you open up an area and create a kitchen that flows into a living space, you might recoup 70% to 80% of the financial investment, notes March. “But creating a space your family can gather in — and connect in — might be priceless.”
This article was written by/for Wells Fargo Advisors and provided courtesy of Jonathan D Soden – Partner in Allentown, PA at 610-437-5650.
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