Will Your Remodeling Project
Pay Off? |
Are you considering a big home-improvement project or a remodel? If you plan to sell, the right improvements can make your home more enticing to buyers, reduce its time on the market, and increase its sale price. If you’ll be staying in your home awhile, the right project can make your home immediately more livable and functional while increasing its value over time. In either case, you want to ensure a return on your investment, and these guidelines will help you do just that.
Know the “cost versus value” for specific projects. What types of home improvements are most likely to give you a good return on your investment in your geographic area? Remodeling magazine’s annual Cost vs. Value Report is an essential resource for anyone considering a major project. The free, comprehensive report is available online at remodeling.hw.net/2008/costvsvalue/national.aspx. A few clicks will show you approximately how much you can expect to spend on a particular project in your city or region, and which specific improvements are most apt to recoup your costs. It’s interesting to note that certain projects are fairly safe bets for recapturing your investment regardless of where you live: replacing windows and siding, adding a wood deck, and minor kitchen and bath remodels. But you might want to think twice before adding a sunroom or remodeling a home office; the report reveals that these projects will probably earn you the least amount back on your investment.
If you’re selling ... When preparing to sell, it’s generally safest to invest in exterior improvements, especially those that improve your home’s curb appeal. This might mean adding new landscaping in the front yard or shoring up a sagging front porch and giving it a fresh coat of paint and some welcoming details like colorful potted plants. And while it’s not very exciting to replace an old roof, forlorn siding or drafty windows, these essential improvements pay off quite reliably.
If you’re thinking of putting your house on the market, a no-risk, zero-cost first step is to consult your Windermere agent, who can recommend some specific improvements that will appeal to buyers in your area while providing you the best return on your investment.
If you’re staying ... If you have no plans to sell, your primary concern is that your home is beautiful, comfortable and functional for you. You don’t need to immediately recapture your home-improvement investments, but prudent choices will ensure that you’ll recoup your costs over time. In an older home, adding a bathroom to the master bedroom is a great example of an improvement that makes your home immediately more livable, and that will more than pay for itself at sale time. Also ensure that any improvements offer flexibility for you or future owners. For example, a state-of-the-art home office might be essential for you now, but down the road that space might serve as an extra bedroom for an aging parent. Keep the room flexible by using furniture that can be easily moved, rather than built-in custom cabinetry.
Do be sure that any renovations have broad appeal. For example, finishing a basement to add living space can be a money-smart investment if it’s a daylight basement with plenty of natural light. But a dark, closed-in space won’t be appealing to your family members, let alone future buyers.
Respect the integrity of your home’s original design. “Every agent has walked through an open house that boasts a newly remodeled something, but it doesn’t fit the rest of the house,” says Maggie, a Windermere agent. “You feel terrible for the seller, because they’ve wasted a lot of money.” She adds, “If you’re selling a little 1940s house in a desirable old neighborhood, prospective buyers aren’t expecting to see anything sleek or ultramodern. They’re looking for cozy, clean and charming. Now, if there was originally no bathroom on the second floor and you added one, that’s obviously a big plus—especially if its aesthetics complement the rest of the house.”
Keep in step with your neighborhood. The real estate commandment, “Thou shalt not overbuild,” has never been truer. Some homeowners sink too much money into improvements and then, in an attempt to recapture their costs when selling, price themselves out of their market. (If you own one of the priciest homes in your modest neighborhood and want to sell, your potential buyers are probably looking in a more expensive area.) On the other hand, it’s smart to keep your home’s features competitive with those of surrounding homes. Find the right balance with some advice from your Windermere agent, who can give you a specific bull’s-eye for your neighborhood.
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Home Pricing Guide |
Whether you’re hiring someone to replace your front door or build an addition, these three rules will help ensure that your next project goes smoothly.
Find a contractor you love. When it comes to home-improvement projects, excellent contractors and craftsmen are worth their weight in gold. So ask your friends and your Windermere agent for their highest recommendations, then meet the candidates and check out their completed projects and references. Many homeowners will delay a project’s start date to wait for the right contractor; decide ahead of time if you’re willing to do so.
Be up front about costs and schedule. Before any work begins, always get a signed estimate detailing agreed-upon tasks, costs and timeline. When the inevitable changes arise, avoid misunderstandings and billing surprises by asking, “How will this affect our costs and schedule?” While some contractors are very direct with this information, others are reluctant to bring it up—so you need to.
Remember the “Good, Cheap, Fast” rule. This rule—which will help keep your expectations realistic—states that you may choose only two qualities and must be willing to sacrifice the third. For example, if someone promises work that’s cheap and fast, it probably won’t be good. If your excellent tile guy will work weekends to complete your job sooner, you’ll get good and fast, but it certainly won’t be cheap. Your highly skilled brother-in-law is willing to build you a beautiful front porch at a very low price? Don’t expect it to be done fast. If you do happen to find someone who’s good, cheap and fast, count your lucky stars!
Small Changes Bring a Big Payoff
When Tom and Nicole were preparing to sell their two-bedroom home and look for something bigger to accommodate their growing family, they nearly made a costly mistake: “We had convinced ourselves we needed to completely redo the kitchen before we could sell,” Nicole admits. “But our Windermere agent, David, and a few of his colleagues did a walk-through, and they said ‘no way’ to a kitchen remodel.”
Nicole adds, “Instead, they recommended a few improvements. We replaced our kitchen sink and faucet with something very attractive and practical. We replaced our ancient dishwasher, and we updated a few light fixtures. Tom’s dad volunteered the labor, so our costs were just under $1,200.”
“On the other hand,” adds Tom, “I guess we’d gotten used to our main bathroom, but David and his group immediately pegged that as a problem area. So we replaced a small pedestal sink with a new vanity unit that had lots of storage, and we removed the rickety sliding door on the tub and replaced it with a shower rod and curtain. Those changes cost less than $700, and boy, what a difference.”
Tom concludes, “We’re not real estate pros, and we didn’t have an objective view of our house. The smartest thing we did was to accept some free counsel from experts who know our market. We did exactly what they recommended—which included lots of little jobs that kept us busy for a few weeks. The house sold in 22 days at our asking price, which, in our area, is pretty amazing.”
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