In 2018, a low inventory of new houses and high prices of existing homes have slowed down the housing market. Potential buyers, deterred by the high prices of homes, are opting to rent rather than buy as they wait to see what happens. What this means for homeowners seeking to sell their home is that they need to find an edge which will make their property stand out and be more attractive to potential buyers.
For many people, the first idea that comes to mind to achieve this goal is a home renovation. However, before jumping into a complex and costly project in an attempt to up the value of your home, it is important to know that dishing out lots of money on a renovation is not guaranteed to automatically up the value of a home or make it a more attractive purchase to buyers.
When it comes to renovations, in order to get a strong return on investment, the project needs to be carefully selected. Some projects are much more likely to payoff than others. The general rule is that curb appeal projects such as improving landscaping, installing a new front door or replacing an old garage door may lead to higher returns than other more complicated, invasive and expensive renovations.
For example, rather than sign off on building a backyard patio it would be more worthwhile to install a steel-reinforced front door for only a few hundred dollars. The front door, unlike a patio, has a nearly 100 percent return on investment. Similarly, a garage door replacement, a relatively inexpensive repair, can recoup about 85 percent of the investment. Turning the garage into an added bedroom, however, would be more costly but would not increase the home’s value to the same degree. In both cases, the additions add significant value to the home because they make the home look fresh and increase the home’s security.
In many cases, the same goes for the inside of the home. Making the house look fresh by updating countertops or adding a new coat of paint can go a long way in the eyes of potential buyers. Experts also recommend that renovations should be done with an eye towards making the design appealing to as many people as possible by avoiding specific styles or colors that may turn off some buyers.
When it comes to larger renovations, the ones that may be the most worthwhile are bathroom and kitchen remodels. Over the years bathrooms have acquired an elevated status. Nowadays, small and simply functional bathrooms will not cut it, so homeowners who lack more spacious and comfortable spaces may be wise to upgrade the bathroom.
Likewise, many buyers are seeking modern and efficient kitchens. However, keeping the project limited in scale is important here, too. A minor renovation on a kitchen will recoup 80 percent of its cost, according to Remodeling Magazine, while a major mid-range kitchen remodel has only a 65 percent return on investment.