Top projects that pay back
For many sellers, the pool of buyers is smaller than it has been in years past. And the laws of supply and demand state that when supply is up and demand is down, suppliers have to be smart. And sellers – you’re the suppliers. Investing in your home by remodeling can still be one of the smartest financial investments, and buyers’ incentive, you can make. But you must be careful where you make that investing: not every remodeling project is equal.
The National Associations of Realtors releases a yearly report detailing trends in the home remodeling market, including a list of projects that pay back the greatest percentage. According to this report, projects that enhance the curb appeal of your home are on top, with kitchen remodeling being the only home interior project on the top 10 list.
It is important to remember that there very few projects for which you will recoup the total amount spent, so choosing your investments wisely is key. Below is the top 10 list of remodeling projects that produce the largest return on investment, with the national average of percent return in parentheses:
- Upscale fiber cement siding (86.7%)
- Midrange wood deck (81.8%)
- Midrange vinyl siding (80.7%)
- Upscale foam-backed vinyl (80.4%)
- Midrange minor kitchen remodel (79.5%)
- Upscale vinyl window replacement (79.2%)
- Midrange wood window replacement (77.7%)
- Midrange vinyl window replacement (77.2%)
- Upscale wood window replacement (76.5%)
- Midrange major kitchen remodel (76.0%)
Other projects that didn’t quite make the list but can still be good investments when executed well are bathroom renovations (74.6%), converting the attic to an additional bedroom (73.8%), and basement remolds (72.9 %).
Why renovations pay
Renovations have a number of advantages. For better or worse, many home owners are spending more time in their current home than originally expected. Remodeling can allow home owners a change of space while still allowing them to stay in their current home longer and build more equity.
Renovations also make future buyers’ lives easier. Most buyers want a home that is “move-in ready.” Buyers are open to remodeling down the line, but many don’t want the stress, or financial burden, of immediate renovations. Doing the bigger projects for them can increase the number of buyers who are willing to consider your home.
Along these same lines, doing some of the more urgent projects up front can reduce your own stress as you approach the negotiating table. A time-honored buyers’ negotiating technique is to peck away at the price they are willing to pay for your home by pointing out its flaws. Cut them off at the pass by doing many of the bigger eyesores before even putting your home on the market.
None of this means, however, that every home owner should do every renovation. Some neighborhoods can support a better return on investment than others, so it may be wise to consult your Realtor about the specifics of your neighborhood before venturing into any major renovation projects.
Quick fixes to increase value
Don’t have the cash to invest in a major remodeling project right now? Below is a list of quick fixes that take very little time and money but can still help increase the value of your home.
- Buff up the curb appeal. The old adage has always warned us not to judge a book by its cover. But guess what? We do it anyway. The first impression an prospective buyer sees of your home is from the street (or at least a picture taken from the street), and you want to make a great first impression. Check the condition of your landscaping, paint, roof, shutters, front door, knocker, windows, house number, and even how window treatments look from the outside. And add something distinct – like a large flower pot or cozy bench – to differentiate your house from all the others.
- Enrich with color. Paint is cheap, and it can quickly change the whole tone of a room. But don’t thing that a new paint job means white or neutrals. Add welcoming colors to your walls, such as soft yellows, pale greens, and warm blues. Just don’t go overboard with the pinks and oranges.
- Upgrade the kitchen and bathroom. The kitchen and bathrooms are often the most important rooms in the house. Make sure you clean them from top to bottom, but do a little updating while you’re at it. Replace the pulls, sinks, and faucets in the bathroom or update the kitchen with a splash of new stain or paint on the cabinet doors for an inexpensive makeover.
- Add old-world patina. It’s the little details that can make the difference. Install crown molding at least six to nine inches in depth, keeping in proportion with the room’s size and in-line with the room’s architecture. For ceilings nine feet high or higher, add dentil detailing, small tooth-shaped blocks used as a repeating ornament.
- Screen hardwood floors. Buyers favor wood, but refinishing can be costly and time-consuming. Screening cuts dust, time, and expense; and all it entails is a light sanding and a coat of finish.
- Clean out and organize closets. Now’s your chance to rid yourself of all the items you haven’t worn in years! Get rid of (or at least box up and store away) all the clothes that you can’t remember the last time you wore, and organize what’s left. Closets are best only half-full so that buyers can visualize their stuff fitting in.
- Update window treatments. Buyers want daylight and views, not dated, heavy drapes that make rooms dark. To diffuse light and add privacy, consider energy-efficient shades and blinds.
- Hire a home inspector. Know what work needs to be done and do it before the buyer comes to you with a long list of demands. Doing a preemptive inspection before your home even goes on the market allows you to be proactive and make sure your home is a fit as a fiddle.
Source: Information in this article has been provided courtesy of the National Association of Realtors and Realtor.org.
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