According to Remodeling Magazine’s annual survey, only steel entry-door replacements can be counted on to boost home value enough to recoup 100 percent of costs. Of course, the value of a renovation doesn’t depend on the resale price alone, which makes deciding whether to do one more complicated than just crunching numbers.
“If the purchaser walks into a home and says, ‘Wow, look at this kitchen, honey, it’s so great,’ and if that home sells quicker, the seller still gets value from the renovation, whether they get the return on investment or not,” says Kit Hale, general manager of MKB Realtors in Roanoke, Va. The home might sell quicker, or the buyer might be so excited about a particular feature that they ignore other problems, such as water damage or much-needed maintenance elsewhere.
For anyone trying to decide whether to take on a home renovation, these five tips can help:
1. Think about what you, the current homeowner, want from your home.
Homeowners can get a lot of value out of renovations before they even put the home on the market. “If you have a dated kitchen or the stove doesn’t work, you can invest money now to glean some enjoyment as well as make the home more appealing when you sell it,” says Hale.
That’s what Erin Schaff and her boyfriend did when they decided to upgrade their two-bedroom condo in Victoria, Canada, several years ago. “It wasn’t in horrible shape, but we wanted to upgrade,” she says, so they spent about $10,000 replacing the baseboards, window trim, and floors. They also remodeled the bathrooms and upgraded the hardware. In addition, they put new cabinets, appliances, and granite countertops in the kitchen.
Schaff and her boyfriend enjoyed all those upgrades before deciding to sell their home earlier this year. She believes the renovations paid off, too. “Had we not renovated, we probably would have lost money as we had purchased the condo at the peak of the real estate boom. Instead, we turned a profit and covered most of the costs of purchasing the house we now live in,” she says.
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