With the start of a new year, many people turn their attention to improvements. If your New Year’s resolutions include home improvement projects, it might be wise to evaluate them not only for the benefits they will bring you while you live there, but the value they will carry when it’s time to sell.
If you think that money spent upgrading your home automatically translates into a higher sales price, you are likely to be disappointed. In many cases, this is not the case.
“It’s a very common misconception,” says Stephanie Chan, a top broker and partner at Prudential Locations LLC. “The good news is that by doing some simple research before choosing your upgrade projects, you can avoid common yet easily avoidable pitfalls and maximize the return of your home improvement dollars.”
Mistakes include over-improving your home or selecting styles or colors that may not appeal to buyers. And, unless you’re a professional, Chan advises against do-it-yourself projects, which may showcase expensive materials but suffer from poor workmanship or design, or colors that are too loud. Inappropriate upgrades can be a waste of money, she says, and can end up being more of a detraction than an asset.
“I brought a client to a gorgeous apartment – the floor-plan, the views, everything was great, except for the bedroom,” Chan describes. “The owner recently painted that room a shocking red and built in very awkward shelving. It was such a turnoff that the clients decided not to move forward with buying the unit, despite all its upsides. Unless a renovation is universally appealing, don’t count on it to help sell your apartment.”
In the case of paint, you might enjoy non-traditional color schemes while you live there, but make sure to budget for re-painting when it comes time to sell. Neutral color schemes, and new paint in general, will show the best.
Remodeling projects that sell and recoup the highest percentage of their cost, according to Remodeling magazine’s 2011-12 Cost vs. Value Report (www.costvsvalue.com), include doing a minor kitchen remodel – such as upgrading cabinets with new doors and drawers, installing new appliances, and updating countertops and sink, and replacing the front door and garage door. Other projects in which sellers are able to recoup 60 percent or more of their costs are adding a wood deck, replacing windows, adding a second story or a family room and remodeling a bathroom.
“In any home, the quality and appearance of the kitchen and bathroom are central,” Chan says. “They are both often-used rooms that wear down quickly, so special attention should be given to keep them constantly fresh and appealing.”
She adds that simple upgrades have the most impact.
“You can minimize the cost by refacing cabinet doors as opposed to purchasing new cabinets,” says Chan. “Don’t change the bathtub, but maybe have the surface reglazed. Buy a new lighting fixture or change a rusty old faucet.”
It makes sense that a tastefully upgraded home will generally sell faster and for more money than a competitor that doesn’t show as well.
But it is equally true that shoddy workmanship and unconventional color schemes or design can send buyers running.
It’s all about making a home really sparkle.
“New appliances can easily and quickly give the house an edge,” Chan says. “If I take a buyer to five houses and one house has new carpet, a fresh coat of paint and new appliances, that goes a long way.”
Some of the projects where you can expect to recoup a smaller percentage of your investment include replacing windows and the addition of a master suite, a
bathroom, or a garage, according to the study. Likewise, spending a lot of money on the wrong improvements may make your home less attractive to potential buyers.
For the maximum return on your improvement investment, check with your Prudential Locations agent to find what currently sells and what doesn’t.