There you are, Mr. or Mrs. Home Improvement — all gung-ho about renovating this, or remodeling that, with an eye toward making it all pay off via increased home resale value at selling time. If that’s the case, a word to the wise is in order: Caution.
That is, proceed with caution, and don’t go overboard just because your friend’s second cousin supposedly recouped two thousand percent of his kitchen renovation costs when he sold his place. Even if that were true, that would be an extremely rare situation.
As a matter of fact, many experts advise you to plan your remodeling projects based more on the amount of satisfaction you’re likely to attain, rather than renovating based solely on the resale gains you’re likely to reap later. The catch phrase in this regard should be: “Don’t overdo it”
That being said, it’s hard to get away from that resale value thing. So, if you’ve been planning a home improvement project or two for a while — mainly for you and your family’s benefit — but with a focus on future return-on-the-dollar, there are some projects that fit the bill nicely, according to real estate experts. For example, remodeled kitchens are highly likely to provide you with a nice return-on-investment (the ratio of money spent on the project to how much it’s worth to a potential homebuyer). That’s due, in large part, because a kitchen is a focal point of the home for many buyers.
But, here again, caution is first and foremost. You should be aware that a minor kitchen upgrade, mainly consisting of painting, repairs, and perhaps a new appliance or two can run between $8,000 and $9,000. On the other hand, a major kitchen redo – appliances, new flooring, lighting, cabinets and wall improvements can easily extend beyond $30,000. But, here’s the really interesting part – the minor kitchen renovation project has been shown to return to their owners upwards of 90% as a return-on-investment, compared to only 71% for the major remodel. Therefore, unless you can really afford it with no financial strain, the minor kitchen redo would be the way to go for most homeowners.
Bathroom remodels are also way up there in terms of returning excellent value. Statistics show that a bathroom redo will set you back about $9,000, while a bathroom addition will run upwards of $14,000. In both instances, you could expect about an 80% return-on-investment. You’ll want to consider your immediate needs as to which one will benefit you the most.
An outdoor deck addition is another home upgrade that can pay nice dividends when you sell. The return-on-investment for adding a deck is around 55%, according to some real estate analysts. But consider the price tag carefully – approximately $8,000, as well as your own enjoyment factor, before proceeding.
In addition, don’t get too extravagant with your remodeling upgrades to the point of showing up your neighbors. That is, making home improvements, well beyond what is considered to be the norm for your neighborhood, is oftentimes detrimental to your wallet. Noticeably raising the price of your home in an effort to recoup excessive remodeling costs can come back to haunt you.
Likewise, beware that using bold colors – for flooring, walls, exterior, etc., or adding eccentric design elements to your home may seem perfectly normal for you, but can be very disadvantageous when you sell. Try to stay with neutral colors – they will be more appealing to most potential homebuyers. Experts also advise that extremely pricey flooring and lighting fixtures can make a home harder to sell, particularly when it outclasses surrounding homes in the area. Astute homebuyers realize that high maintenance (often a trademark of super-expensive floors) often tags along with high price.