Maximize the Value of a Home Sale Through Renovations

How to Maximize the Value of Renovations for a Home Sale

Renovating a house makes typically it more enjoyable and functional for the owners. But what if you are planning to sell your house? Most people renovate before they sell believing it will help them to get maximum value for their home, but will it?

From what we’ve seen, it’s usually worth the manageable effort and expense to renovate before you list your house on the market, but with a caveat: make sure the renovations you are doing are appealing to the target buyers. According to Forbes (https://www.forbes.com/sites/forbesrealestatecouncil/2017/05/03/12-most-...), many homeowners overemphasize on renovations to suit their personal taste without considering current styles or their target market.

Are renovations worthwhile in my case?

Before we get into which specific renovations maximize value, lets talk for a minute about whether it is worthwhile to make the renovations vs. selling “as is”. Are you someone who has the time to renovate before the sale or do you have to move quickly? Do you have the energy to find a reliable contract and oversee the work? Can you tolerate delays, which are typical in home renovation projects? We have curated a list of resources and advice setting out the considerations of whether or not or renovate before a sale which can be found here: https://www.househeroes.com/sell-my-house-needs-repairs/.

Another simple way to make the decision is to compare the as-is price you would get from a cash home buyer to the price your real estate agent thinks you can get for a renovated home. Bring in the real estate agent, a cash home buyer and a trusted contractor and run the numbers. Ask your contractor if the renovations are relatively straightforward or will there be delays and surprises – as people typically find in old houses. Some people are weary of calling in a cash home buyer just to get an estimate, but many cash home buyers are happy to do this as it might get result in business for them. If the as-is price seems fair but the renovations seem costly and laborious, selling as-is might be your best bet.

Which renovations will give you the best ROI?

New floors and walls, a new roof, new appliances, a new boiler, and fancy landscaping will all undoubtedly increase a home’s value, but by how much? A new boiler is not typically a “wow” factor for buyers even though boilers have a high price tag (say $10,000), and yet making sure the house has good curb appeal can be of incredible value. Here are some suggestions for the renovations to focus on to maximize your return on investment:

1. Refinish or replace floors and walls

Refinishing or replacing floors and painting the walls are quick and usually one of the least expensive ways of giving your house a new life. You can expect roughly a 15% rise in asking price.

If you want to put a new carpet, choose a sturdy, builder grade fiber in a neutral color. Ensure it doesn't compete with your wall color. Some buyers prefer hardwood floors, but they are pricey to install. However, if you have existing hardwood floors, consider refinishing them to bring back their luster. If you want a ceramic tile, choose a less expensive and durable option.

2. Modernize the bathroom

The bathroom or any other place with utilities is a must when you need to upgrade and add value to your house. It is an excellent time to replace old tubs with modern fixtures such as tiles shower stall or glass or jetted tub. You may spend between $2,500 and $ 5,000 updating these features, but recoup 80%-90% on the cost in home value.

You can also include new vinyl flooring, updated lighting, and updated sink fixtures.
The simple upgrade can easily add an extra $3,500 to $5,000 to the total price of your home.

3. Replace your existing front door

Replacing your existing door with a new steel door can get you over 100% in return on resale.
Here’s the thing; the front door gives your house the first impression to potential buyers. A new garage door too. A recent study revealed that in 2018, the front door replacement has the highest return on investment at 98% up from 85% in previous years (http://blog.rismedia.com/2018/cost-value-home-improvement-projects/). It is one of the best inexpensive upgrades you can make with nearly a 100% return on investment.

4. Replace the roof

Replacing the roof and your home’s unsightly vinyl sliding will yield 74.3% ROI for the upgrade.
During inspection and appraisal, having those repairs done will increase the value of your house.
It will reduce the likelihood of making fixes or adjusting the price later in the process.

5. Remodel the kitchen

A modern kitchen is a top priority for home buyers. But overhauling the current kitchen can be expensive.
Consider making these low cost changes to your kitchen: painting and re-facing old drawers, preferably with white, buy new cabinet drawer pulls, install sleek light fixtures.

Granite or quartz countertops are also hot, but they can be pricey, depending on your kitchen layout. A less pricey alternative is simply adding a clean, white ceramic tile backsplash to create visual appeal. Get bids from professional remodelers to figure out how much new countertops will cost—and if it fits your budget and timetable for selling.

The best places to improve are not always bathrooms and kitchens. Instead, check out this report to see how differnt renovations fared in 2018: the 2018 Cost vs. Value Report gives details of projects with the highest ROI in the reports (http://blog.rismedia.com/2018/cost-value-home-improvement-projects/).

Last but not least, to be sure you're spending wisely, ask experiences friends, family and acquaintances for their advice (real estate agents, contractors and employees at the local hardware store are particularly good resources). No matter your choice, remember that living through a renovation is a stressful process, and it's essential to determine whether the financial gains will be worth the strain of a refurbishment. While it's not always an easy decision, I hope this helps you make the right one.