Renovations can make a big difference in how fast you sell your home and how much return on investment you get. But before you hire a contractor, find out which improvements are most likely to pay you back.
“If you’re going to stay for less than five years, be budget conscious about what you’re doing,” says Everett Collier of the National Association of the Remodeling Industry. “But if you’re going to stay for more than five years, think about what will make you happy.”
Recouping Your Investment
|
|
National Average Cost
|
Recouped Amount of Cost
|
| Midrange kitchen remodel |
$17,928 |
85.2% |
| Midrange bathroom remodel |
$12,918 |
84.9% |
| Master suite addition |
$94,331 |
72.6% |
| Midrange sunroom addition |
$49,551 |
66.3% |
| Home office remodel |
$20,057 |
63.4%
|
Kitchens
Typically, kitchens cost the most of all rooms to remodel, but you’ll also enjoy a big gain in sales price – as much as 80% of what you spend on a major, midrange remodeling job, according to the recent Remodeling magazine Cost vs. Value Report 2006.
If resale is your top priority, go for broad appeal.
- When replacing or adding cabinets, use lighter woods and nothing too contemporary.
- Stick with features and finishes common to your neighborhood and to the kind of house it is. Don’t put granite countertops in a starter home, for instance.
- Ask local salespeople what sells best.
- Change out cracked and stained countertops, but not always with pricey granite. Less expensive options include ceramic tile and concrete.
- Select up-to-date appliances. If you’re on a budget, visit retailers that sell secondhand appliances or those almost as good as new.
- Keep in mind that if the kitchen is shabby to begin with, any upgrades will help impress potential buyers.
Bathrooms
A major redo with new flooring, pedestal sinks, designer tubs, and showers with multiple shower heads can cost as much as $40,000, says Gregory A. Miedema of the National Association of Home Builders. “It’s the higher-end options like granite, frameless glass shower doors, and basin vessel sinks that add to the cost,” he says. A midrange bathroom remodel costs $12,918.
However much you spend, upgrading the bath garners rewards at resale. Recoup 84.9% for a midrange job, and in some regions even more – in the Pacific Northwest, for instance, up to 103.2%, according to the Remodeling report.
A few quick fixes include:
- Painting cabinet doors and updating hardware.
- Adding stylish new faucets.
- Reglazing worn tub and tiles.
- Replacing older fluorescent lighting fixtures.
“Lighting changes can make a big difference in buyers’ reactions,” says Pat V. Combs, president of the National Association of Realtors.
Master Suite
Remember, if you upgrade your home you may need to upgrade your insurance coverage, too. Renovations can up the cost of what it would take to rebuild, so make sure you have enough coverage.
A spacious master suite with a sitting nook, a changing area, and a closet that has organizers in place can make buyers swoon. And the master bath is a real selling point.
Without big bucks, plush towels, candles, and new cabinet pulls can make the master bath seem inviting and updated.
Outdoor Deck
If right for your climate, outdoor living areas make great investments. You can recoup more than 75% of the cost. To dress up an existing, weathered deck, restain it for minimal cost, says Dean Herriges of the National Association of the Remodeling Industry. Power-wash synthetic decks or clean them according to the manufacturer’s directions. “Buyers are looking for the least amount of work they’ll have to do, so if these things are done, it adds value,” Mr. Herriges says.
Attics and Basements
The attic might transform into an extra bedroom, an office, or a playroom. “Especially in older houses, look into it,” Ms. Farrar-Wegener says. “Get it as cleaned out as possible. Put in good lighting so people can see the potential.” Basements, too, have potential for more living space, Ms. McCormick says. But she says not to spend a lot on them. Buyers often expect this part of the house to be unfinished, so it’s not necessary to spruce it up just to sell the home.
Choose Upgrades Wisely
Not all additions add value. A midrange sunroom addition can average $49,551, with a potential for recouping the cost of only 66.3%. Home office remodels cost on average $20,057, recouping only 63.4% of their cost. Look at neighborhood trends. “It doesn’t make sense to put in a media room when no one else in the area is doing that,” Ms. Farrar-Wegener says. “Yours isn’t a neighborhood where people will look for those kinds of amenities.”
Bottom Line
“People want to envision living in your home,” Ms. McCormick says. “If you let things go and get out of date, the impression will be that you’ve left other things, like the roof and furnace, unattended, too.”
However, before spending loads of money on upgrades, consider whether your home is in a declining market. If so, it’s less likely that you’ll be able to recoup your costs.
Remember, if you upgrade your home you may need to upgrade your insurance coverage, too. Renovations can up the cost of what it would take to rebuild, so make sure you have enough coverage.
Source for all average cost figures: Remodeling 2006 Cost vs. Value Report, Remodeling magazine.
