|
Maximize Your Home
Improvement Budget
Remodeling
can make your home more valuable, as well as more livable. Although the cash
you spend on improvements seldom yields a dollar-for-dollar return when you
sell your home, some remodeling will certainly return more of your
investment than others. Stick with the projects that will allow you to both
sell your home quickly and recoup most of the investment.
Strategies to
Bank On
There are a few guidelines to follow that will help improve your chances of
a good return:
-
Keep the
value of your property within 15 to 20 percent of others in your
neighborhood.
If you live in an area of $150,000 homes, buyers probably want a home
close to that price. Buyers who can afford pricier homes will shop in more
expensive neighborhoods.
-
Style your
remodeling for mass appeal. Buyers prefer neutral, mainstream design. Play it safe
with colors, patterns and kitchen design. Consider local preferences, too.
-
Give buyers
quality construction. Use materials that look good and wear well. If you plan to do the
work yourself, obviously you can recover a substantial amount of your
investment; however, honestly evaluate your ability to do it right. A poor
do-it-yourself job costs money in the long run.
-
Keep your
remodeling compatible with the existing house.
Additions and improvements that look “tacked on” may detract from a home’s
appeal. Choose materials and design elements that match or blend with
what’s already there.
-
Finally,
before beginning any major remodeling, consider consulting a professional
for advice.
The right improvements can help a home sell more quickly and for a higher
price.
Type of
Improvement: Minor Kitchen Remodeling
An older-style kitchen can easily be updated without major structural
changes. Painting the walls and cabinets might be a starting point. Vinyl
flooring, new countertops, a ceramic-tile backsplash and a double-basin sink
are some other modern options. Some new appliances might be included in the
facelift such as a dishwasher or a drop-in range.
-
Recovery
can reach 90 percent. Kitchen improvements usually offer high returns. The smaller your
investment in a kitchen facelift, the higher the potential for recovering
costs. If resale value is critical, avoid extras such as state-of-the-art
cook tops or premium countertop materials. A modern kitchen is a top
priority prospective buyers look for and are willing to pay to have.
Type of
Improvement: Major Kitchen Remodeling
In some cases, an antiquated kitchen may need to be gutted. New cabinets and
countertops will probably be necessary, as will new appliances such as a
dishwasher, stovetop with grill, microwave oven, wall oven and refrigerator.
-
Recovery
can reach 80 percent. Though an outdated kitchen detracts from your home, a total redo
makes sense only if the colors and design appeal to most buyers. Consider
features such as a second sink that makes the kitchen work for two.
Type of
Improvement: Adding a New Bath
Second only to a newly-remodeled kitchen, replacing an older bath ranks high
in terms of dollar-for-dollar return. Options might include a new tub, sink,
shower and new flooring. Adding a new or larger window to allow more natural
light is also a common addition to the bath.
-
Recovery
can be as high as 90 percent. A second full bath will usually net a higher return than a third or
fourth bath. Neutral colors have the broadest appeal.
Type of
Improvement: Bathroom Remodeling
Sometimes a dated bath simply needs a facelift. Ceramic tile might be
installed on the countertop, tub surround and floor. Walls can be painted
and cabinets may be replaced or painted for a fresh look. A new sink and
faucet set are another option, as are new light fixtures.
-
Recovery can be as high as 90 percent.
Fixing up a master bath makes more sense than splurging on a guest bath.
If updating the only bath, consider revamping it for double occupancy with
two sinks and a separate shower and tub.
Type of
Improvement: New Room
A ground-level addition may pay for itself at resale. To add a room with a
foundation and crawl space onto the back of your home, work will involve
floors, walls, windows, roof, door and interior and exterior painting. To
maximize profits, if your home is a two-story, consider making the addition
two-stories high rather than one; many of the costs are the same as for a
one-level addition. But since value is based on square footage, adding a
second floor when already building a first-floor addition means your profits
increase substantially while your expenses do not.
-
Recovery
can reach 90 percent. Be careful not to overdevelop the property for your neighborhood.
For example, a room addition that is a third bedroom will be more valuable
than a fourth bedroom. A first-floor family room is also a strong selling
point.
Type of
Improvement: Master Suite
A master suite can be a persuasive element to prospective buyers. By
annexing an adjoining area into the master bedroom and bath, you can save
the expense of building an addition. The suite might feature a walk-in
closet. The bath may require updating to maintain a style consistent with
the new suite.
-
Recovery
can reach 80 percent. To create a luxurious master suite, it’s cheaper to modify
underutilized areas than to add on because the roof, foundation and some
walls are in place. But if you eliminate a third bedroom in the process,
you may find it harder to sell your home.
Type of
Improvement: Finished Basement
Basement conversion is usually an inexpensive way to increase square
footage. A large basement might be divided into a workroom, game room and
bath. Features would probably include insulation, painted drywall walls,
ceiling and floors. The half bath includes a toilet and sink.
-
Recovery
can reach 70 percent. Pouring money into a below-grade space doesn’t yield the return it
would in other areas of the home. The project might still be a great
solution for a young family who plan to live in a too-small house for
several more years. Recovery rates are higher for a walkout basement.
Type of
Improvement: Garage
If most homes in your neighborhood have garages, you might consider adding
one too. A concrete floor, footing, walls, roof, siding, windows and, of
course, the doors are included in the average 600 square foot, two-car
garage. An oversize two-car garage might also include a workshop and storage
area.
-
Recovery
can reach 65 percent. An oversize garage has advantages if you need work and storage
space, but it some cases may over-improve the average home in a
middle-class neighborhood. The return on a garage depends in part where
you live -- in cold weather markets, buyers demand them
Type of
Improvement: Deck
A popular addition, the deck is an ideal do-it-yourself project. If price is
a consideration, use pressure-treated wood, the least expensive type of deck
lumber by far. The project will include excavation, digging post footings,
pouring concrete and in most cases, constructing stairs and railings.
-
Recovery
can reach 75 percent.
Outside living areas are popular in all climates. The project will be more
desirable if the deck includes features that provide some privacy. A small
entry deck that replaces a crumbling concrete stoop can make a positive
impact on the sale of your house.
Type of
Improvement: Sunspace
If your home suffers from a lack of natural light, you might consider adding
a sunspace. The simplest option is adding a prefabricated solar greenhouse
kit with thermal glazing to the back wall of your home. A sliding glass door
may be installed.
-
Recovery
can reach 20 percent. Real estate professionals generally feel that a greenhouse adds
limited or no value to a home. You’d get better payback from a sunspace
bump-out that expands the square footage and views of an existing room.
Type of
Improvement: Swimming Pool
The decision whether or not to add a swimming pool can be problematic; while
some buyers actively search for a pool, many others may wary of the upkeep
required. Basic work will include digging, pouring concrete, brick work and
grading.
-
Recovery
varies by market.
Check out local preferences before building a pool. In colder climates, a
pool may add no value because buyers believe it requires too much upkeep
for its limited use. In warm climates, however, a pool can deliver a 65
percent return or better.
Type of
Improvement: Skylight
To lighten up a room, a skylight seems the obvious choice. A skylight that
features insulating glass can be an added attraction. Work includes
constructing a skylight shaft of drywall and painting.
-
Recovery
can reach 30 percent. Many real estate professionals feel that a skylight adds nothing to
a home’s value. If your house has a dark, stuffy entry or gloomy bath, a
skylight might make it more attractive to buyers.
Type of
Improvement: Windows and Doors
Energy-saving windows and doors have a certain appeal to the
energy-conscious buyer. An aging front door can be replaced with an
energy-efficient door. A sliding glass door may be replaced with an
energy-efficient swinging patio door. Sliding windows may be replaced with
insulated windows.
-
Recovery
can reach 80 percent. These projects improve comfort and appearance and their recovery
value, especially on an older home, is high. On a new home most buyers
assume that windows and doors will be in good condition. If you can do the
work yourself, a good payoff is probable.
Type of
Improvement: Insulation
If you own an older home, your loose-fill attic insulation may have
compacted significantly, causing energy loss. New fiberglass roll insulation
may be added to bring the depth up to 10 inches and help you reap
substantial energy savings.
-
Recovery
can reach 25 percent. Beefing up insulation in your home improves comfort and lowers
energy bills but doesn’t add much value to your home. Today’s buyers feel
entitled to adequate levels and don't pay much more for a house that is
well insulated.
Type of
Improvement: Energy-efficient Fireplace
Fireplaces hold great appeal. Options include going with a prefabricated
fireplace or installing a brick one.
-
Recovery
can reach 100 percent. Many buyers are willing to pay extra for a fireplace -- even in
climates where a fireplace isn’t a necessity. The prefabricated fireplace
project can earn a good recovery because a prefab unit with a boxed in
metal chimney will be much less expensive than a real brick one.
Type of
Improvement: New Heating System
If your furnace is old and needs replacing, an energy-efficient gas furnace
will save money in the long run. The project may not require any major
alterations to ductwork throughout the house, but most likely, a contractor
will be necessary.
-
Recovery
can reach 50 percent. Buyers expect a functional heating system. A high-efficiency
furnace is a bonus they’ll like but may not reward. If your old furnace
works and you plan to sell soon, let the buyer replace the heating system.
Type of
Improvement: Re-roofing
If your roof shows signs of wear, new shingles can improve your home’s first
impression on buyers. Composition shingles can be installed over a single
layer of shingles. If the roof is in good shape, no repairs may be required
before adding a second layer of shingles.
-
Recovery
can reach 30 percent. A new layer of shingles on an older roof doesn’t raise the value of
your home much, but may help you get the price your home is worth. Buyers
usually subtract the cost of a new roof from your asking price when
deciding what to offer.
Type of
Improvement: Exterior Painting
Though it should be part of routine upkeep, exterior painting greatly
increases the look of your home. Some scraping and priming of the wood
siding may be needed to prepare the surface before painting. If the siding
is in good shape, no re-caulking or replacement of damaged siding should be
necessary.
-
Recovery
can reach 50 percent -- or significantly higher if you do the job
yourself. A
fresh coat of paint peps up the exterior and makes it more attractive to
buyers. Choose a neutral shade to broaden your home’s appeal. Preparation
before painting (scraping, filling holes, caulking) is the key to a
project that increases your home’s value.
Type of
Improvement: Siding
If the exterior of your home is in poor condition, it may have to be
resurfaced with lap siding, a substantial investment.
-
Recovery
can reach 35 percent. Although new siding costs more than painting, it may be your only
option if the siding is badly deteriorated. If you have to re-side,
consider newer products that bring your house up-to-date.
Type of
Improvement: Landscaping
As with other remodeling projects, the degree of landscaping buyers expect
varies greatly according to region. Options might include a new concrete
walk with a brick edge, sodding the yard, planting new trees and shrubs,
ground cover for flower beds and window boxes. The extent of work involved
in such a project depends upon what you choose to put into it; unlike many
other projects, landscaping can be undertaken by most homeowners.
-
Recovery
can reach 60 percent. A planting project that perks up your home is a good choice if you
plan on selling soon. Don’t over-plant; some buyers think extensive
plantings are more work than they can handle. Scraggly plants and bare
patches of grass detract from your house no matter how well kept it is
inside.
|
Call Toll Free 1.800.919.7625
