Making the Most of Renovations
Deciding on what to renovate can be a difficult decision, but especially so if you're working with a tight budget. If you intend to sell your home in the future, you want to invest in the projects that will raise the appeal and value of your home. There are a few factors that should be considered aside from cost alone. Here is a guide to help you decide.
Consider the Timing
Remodeling projects should be done when you are planning on staying in the house for several years rather than starting major work for the sake of trying to increase resale value. Since you can't guarantee that you will get a decent return, it makes the most sense to remodel when you will be able to enjoy the benefits. Stick to minor, more cosmetic changes if selling is your primary goal.
Removing debris and clutter from your home is the single most effective way of increasing curb appeal and resale value. A clean, orderly home and yard together with space in your closets is vital. Go through your closet and donate outdated items, or have a yard sale.
Projects With the Biggest Payback
With the resale real estate market strong in most of the U.S., the question of payback continues. Many of the questions in the DoItYourself.com Community Forums are about improvements that constitute a good investment and those that do not. In other words, what should one not improve or renovate from an investment or payback consideration? The table below includes some recently compiled results from the 2013 Remodeling Cost Value Report.
This is about renovations and improvements, not repairs. Items that are broken or working below par should be repaired or replaced. Do-it-yourself articles and forums on this site can help you plan how.
There are three thoughts to consider in determining the benefits of an improvement:
- Personal benefits, which can include lifestyle, health, family, and recreational changes.
- The savings you will derive during the period you remain in your house.
- The estimated potential payback at resale.
|
Home Improvement Project |
Cost |
Payback |
Notes |
|
Basement Remodel |
$61,303 |
70.3% |
|
|
Build a Safe Room |
$12,000 |
20% |
Room should double as a usable living area to increase value |
|
Build a Swimming Pool |
$10,000 |
25% |
May reduce the number of buyers in most areas |
|
Landscaping (Major) |
$12,000 |
25% |
Note adding a brick, concrete or stone patio may raise this to 50% |
|
Add a Garage |
$48,806 |
63.7% |
Payback varies by area. In some areas a larger carport is better. |
|
Landscaping (Minor) |
$3,000 |
50% |
In urban and suburban areas increased privacy is a concern |
|
Replace Roof |
$18,488 |
62.9% |
This value disappears quickly |
|
Replace Siding (vinyl) |
$11,192 |
72.9% |
|
|
Sunroom |
$72,179 |
46.5% |
|
|
Home Office Remodel |
$27,292 |
43.6% |
|
|
Bathroom Remodel |
$15,782 |
65.2% |
|
|
Replace Windows (vinyl) |
$9,770 |
71.2% |
Energy Efficient may also reduce your home operating cost |
|
Add a Fireplace |
$3,000 |
75% |
|
|
Add a Deck (wood) |
$9,326 |
77.3% |
|
|
Kitchen Remodel (Major) |
$53,931 |
68.9% |
|
|
Kitchen Remodel (Minor) |
$18,527 |
75.4% |
|
|
Attic Bedroom |
$47,919 |
72.9% |
|
|
Add 2nd Full Bathroom |
$37,501 |
54.8% |
For 1 and 1-1/2 bath homes this is the best payback |
Take the Type of Home Into Consideration
Naturally, the value of improvements should be appropriate for the type of house being sold. While kitchens and bathrooms have a more consistent return, spending $100,000 on a kitchen in an average home will not bring back a return. Keep the original design of your home in mind. Stick with either the same materials or complementing ones. Aim for a flowing congruency so that your home remains tastefully appealing on the inside and out.
Think through color schemes and patterns in much the same way. Bold, eccentric color schemes that will stay with the house after you sell can deter potential buyers who lean on the conservative side. Overly personalized options like a cute toilet and bidet from France are not cost-justified. Times change, as do tastes, technology, and fads. Five years ago wiring every room with multiple phone lines and Ethernet cables for computer networking seemed logical. Then along came wireless networks and much of that wall cable is unneeded.
Being flamboyant with your remodel is a fine idea for those homeowners who plan to stay in their home for years to come. For those of you looking to move in two to three years, choosing neutral colors for floors and walls will benefit you when it's time to sell.
Research Your Neighborhood
Also consider the improvements you make may put your home out of reach in your neighborhood. When undertaking large remodeling projects, it is smart to research your local real estate market to find out if your project will return your investment when it is time to sell. Depending on where you live, the right project may return 100 percent of your investment. That is why research is the smartest way to begin any remodeling project. The more "sweat equity" you put in, the lower your costs and the higher the rate of return.
When trying to decide whether or not you should take the plunge and remodel, think of your own needs. If you absolutely want to add on a deck, go for it. If you have a spacious basement and could use a children's play area, don't hesitate. By concentrating completely on the return you might get from a home improvement project, you are limiting your options and basing your decision on a return that might be less than you expected.
The enjoyment of improving your home for the rest of your time living in it might far outweigh what money you get back when it is time to sell.
