Remodeling Your Home
to Maximize Your Sale Value
home selling articles and tips
Remodeling a home isn't what it used to be. Today, consumers are spending less on fixing up their homes, even though service costs have dropped considerably.
Since 2007, remodeling costs have come down 10 to 15 percent offsetting consumer's costs for materials, which is up about 17 percent, according to Remodeling Magazine, which authors the annual Cost vs. Value Report. Kitchens and bathrooms get the most attention during a remodel. Remodeling Magazine also says, a homeowner who spends $22,000 to redo a kitchen will earn back 63 percent of the cost when the house is sold. A $21,000-makeover for a bathroom will return 50 percent of its cost.
Because of the recession, more homeowners are concerned about the return on their investment when they want to sell their house. So more of the remodeling home decisions are focused on outward appearance projects that can boost a home's value.
Here are some ways in which homeowners are re-shifting their remodeling priorities.
Add Value Investments
Homeowners are looking for better returns in reselling a home, so in most cases, they will only take on projects that can add to that resale value. Forget about an entirely new basement re-do; that's not going to put profits into a homeowner's pocket.
Exterior Home Projects
According to MSN Real Estate, the top investments are exterior home projects and interior projects with a mid-ranged price. Exterior home projects can include renting electric scissor lifts to replace doors, windows and siding, projects that have a relatively low initial investment that's outweighed by higher ROI expected by homeowners from the investment.
Mid-ranged projects on the internal area of the home, such as changing to stainless steel appliances or upgrading to new sofas for interiors, adds value to the home without the major expenses. Exterior replacements hold the top spot because of the added curb appeal and the peace of mind related to having high quality replacements on the home.
Average Modeling Investment ROI
| Return on an average remodeling investment | |||
| Year | Cost | Recouped at sale | Ratio |
| 2003 | $38,286 | $31,591 | 82.5% |
| 2004 | $36,274 | $29,204 | 80.5% |
| 2005 | $36,849 | $31,932 | 86.7% |
| 2006 | $43,209 | $32,873 | 76.1% |
| 2007 | $47,739 | $33,458 | 70.1% |
| 2008 | $49,866 | $33,568 | 67.3% |
| 2009-2010 | $50,908 | $32,497 | 63.8% |
| 2010-2011 | $45,593 | $27,367 | 60% |
| 2011-2012 | $44,734 | $25,829 | 57.7% |
(Source)
To leave a lasting impression on potential home buyers, the best return on investment primarily relates to the initial cost, the look of the project after completion and the appeal to new home buyers. In all three cases, this is the standard path taken by many homeowners today.
What Not to Add
Home buyers are shifting focus of what is necessary and what is a bonus. Some of the things sellers won't get a ROI on are building in extra rooms, converting attics into home offices, installing solar panels and adding in-ground swimming pools.
Remodeling a home requires careful planning and consideration when it comes to resell value it adds to the house. By opting for smaller projects that add to the value of the home without a high cost, homeowners can take small steps to increase the look and feel of their homes.
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