My neighborhood has a mix of 1970s-era brick ranch, split level, and two-story homes, as well as two-story brick and vinyl homes built in the 1990s. Home prices range from around $200,000 to above $400,000 – depending very much on how well maintained and up-to-date they are. As the owner of a 1975 beauty with a classic traditional exterior and a floor plan that’s relatively small for the area, I’ve been pondering jumping into home remodeling with the goal of updating our kitchen and baths, and perhaps adding another room’s worth of square footage. It’s a dilemma, though, because projects really need to meet two criteria:
- Will my family enjoy the home more and/or find the home more functional if we make this change?
- Will we recoup our investment if we need or want to sell our house within the next few years?
A Few Home Improvements Have Nearly 100% Return on Your Investment
Remodeling magazine online analyzes the relative value of a variety of home improvement projects each year in its “Cost vs. Value Report.” For 2016, across the U.S., remodeling projects recouped an average 64.4% of their investment if the home is sold within a year. According to the report, the top-value improvements for midrange homes include:
- attic insulation (with greater than 100% return)
- manufactured stone veneer, midscale and upscale garage door replacement, and steel entry door replacement (with greater than 90% return
- minor kitchen remodel and upscale entry door replacement (with greater than 80% return)
Kitchen and Bath Remodels Fare Well in Busy Housing Markets
In the busiest U.S. housing markets – cities like Washington, DC, San Francisco, Atlanta, and others—sellers can recoup more than 100% of their investment (see HGTV.com) for other improvements that smaller, less active markets may not value quite as highly:
- bathroom remodel
- kitchen remodel
In general, regardless of your locale, if your goal is to SELL your home soon, most realtors advise concentrating on smaller, less expensive projects that remedy problems, add functionality, or enhance curb appeal. Most advise against major remodeling projects – it’s rarely going to pay off to completely remodel your kitchen, add a room, or put a new roof on your house.
When to Invest in Updates to Your Home
On the other hand, if you’re planning to stay put for at least a year or two, it’s not a bad investment to prioritize projects that provide energy efficiencies (new windows and doors, insulation, etc.), modernization, safety, and comfort. If you live in an older one-bathroom house, it may be worth your while to add a second bathroom. And if you live in a temperate climate, investing in outdoor decking can be beneficial – you’ll enjoy it, as will future residents of your home.
You Probably Won’t Recoup Your Investment on These Upgrades
A word of caution: There are a few upgrades that most real estate professionals will tell you are NOT worth it!
- Swimming pools are great if you will use one yourself, but don’t expect to recoup the dollar amount you put into it if you need to sell.
- High-end kitchen upgrades are rarely necessary to sell a home (unless you’re in an upscale neighborhood or high-end home).
- Garages are nice, but much like swimming pools – it’s wonderful to add one if you will use it yourself, but you will almost never recoup the investment.
I’m still up in the air about which projects to tackle in my home. (There’s also the question of where the money comes from to invest in home improvement projects, but that’s an entire other post for another time.)
Let us know what remodeling projects you’ve taken on – were they worth doing?
If this autumn requires a change of job, a change of pace, or a change of scenery, let us help you buy and/or sell your home. The Vincent Group at GreatNest is a full-service real estate company serving buyers and sellers in Greensboro, High Point, Winston-Salem, Summerfield, Oak Ridge, Jamestown, and other Piedmont Triad areas. We look forward to saving you money by charging a low set fee instead of a percentage commission. Please get in touch with our experienced real estate professionals by calling (336) 790-5210 or by emailing Steve Vincent. Visit our website at greatnest.com.