Glenn Musto | Thursday, September 29, 2016. Homeowners, Realtors, and Building Contractors will almost always have different opinions about what percentage return you can expect from spending money on various home improvements.
According to a 2005 study for the National Association of Realtors, every 1,000 square feet added to a home boosts the sale price by more than 30 percent. A Remodeling Magazine article reports that you can expect 86.4% return on money spent for a bathroom addition. Another article in the same publication reports: “In Baltimore, a $9,400 bathroom remodel recouped 182 percent of its cost at resale, according to Remodeling’s 2004 study.” Yet another expert says, “If you want to get the most out of your home renovation dollars at resale, stay away from the bathrooms.”
Confusing? Yes, it can be. There are certain guidelines, however, that can help with your decisions. Generalizations are rarely accurate about anything. You must decide for your specific property. Most experts agree that any addition or improvement should be appropriate for the neighborhood, home style, geographic area, and home price.
For example, where do you live? Adding a swimming pool might add tremendous value to a home in a family neighborhood in Southern California or Florida. The same addition might very well put off prospective buyers and hurt the final sales price in a retirement community in New England. Adding a $7500 home theater might yield a healthy return in a million dollar home in Beverly Hills, while a similar addition could be totally wasted in a $150,000 condo almost anywhere.
Curb appeal is important, regardless. It has often been said that if a prospective buyer is turned off by the outside appearance of your home, s/he will very likely never find out what you have inside. So, neaten up outside. “Wow” potential buyers with a well-kept lawn, some well-placed shrubbery or small trees, and a bit of fresh paint as needed. Consider adding or shoring up a front porch or attractive stoop or paver walkway.
Most buyers today are looking for a modern and functional kitchen and master bath. Granite countertops and stainless appliances are definitely in vogue. Walk-in showers are welcomed by most buyers – and bigger is better.
If remodeling the kitchen, remember to also consider the layout and workspace. The magic triangle (or quadrangle) represents the area where the stove, sink, refrigerator, and dishwasher are placed to create an effortless flow when working.
Are your carpets and area rugs stained or worn? Nothing turns buyers off more than the thought that they will immediately need to replace all of the flooring in a home. Replacing worn or aged carpet or linoleum is essential, and will almost always increase the value of any home. Most professional stagers will tell you to stay with neutral colors and durable materials. Tile or wood floors are desirable when they fit with the surrounding décor.
Paint is often the least expensive improvement that yields the greatest return. Newly painted walls can freshen up a room or an entire home. Again, remember to choose fairly neutral colors that a prospective buyer can see as compatible with his or her decorating style.
How about a new roof? This one is easy. If a roof is leaking, have it repaired or replaced. Don’t expect to raise the price of the home after wards, however. Buyers expect all homes to have an intact roof. Similar to good water pipes, sewer systems, and working heating and air conditioning systems, any home on the market should have these.
New vinyl siding can make a huge difference in the appearance of an older home. Even though you can expect to get only about 85% of the cost back in added value, this may make the difference in whether your home sells at all.
Consider increasing the overall space in your home whenever doing so helps it conform to the size of neighborhood homes. Buyers may not want the largest home on the block, but they sure don’t search for the smallest, either.
Be sure to evaluate the current housing market in your area before deciding how and where to spend money on home improvements. As an example, in a hot housing market, a kitchen or bath remodel is a reliable investment, often returning more than 100 percent of the cost. One recent article reports that the markets in Washington, D.C., Minneapolis, Chicago, Atlanta, San Francisco and San Diego offered triple-digit returns on a bathroom remodel. Minor kitchen remodels (average cost: $15,273) also provided returns of more than 100 percent in cities including Providence, R.I., Miami, New Orleans and, of course, San Diego, where a $17,928 investment netted $27,000 on resale. We often see positive returns for such upgrades in our area of Florida as well.
In most instances, listen to your Realtor’s advice. A real-estate professional is actively viewing homes on a daily basis, and is familiar with available homes that will be competing with yours in the marketplace. Your goal is to make your home appeal to as many prospective buyers as possible. A professional Realtor can help you decide if, when, and where to spend money to increase the appeal, and thus the value of your home to its full potential.
We are fortunate in Pinellas County, Florida to have homes of all types available, in many different areas and many price ranges. Buyer demand is currently quite strong in Clearwater Beach, Sand Key, Belleair and Belleair Shore, Indian Rocks Beach, Indian Shores, North Redington Beach, Redington Beach, Madeira Beach, Treasure Island, St Pete Beach, Pass-a-Grille, Tierra Verde, and St Petersburg, FL. While more condominium units are generally available, we also have an enviable selection of single-family homes in our beach areas.
If you are thinking of selling your home in any of these areas within the next three to six months – single family or condominium – you’d be wise to find out its true market value today to help with your decisions.
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