BBB: THE TRUTH ABOUT RENOVATIONS AND RESALE
To improve or not to improve, is that YOUR question?
With the traditionally hot spring market approaching, great financing rates, and many homeowners staying in their homes, I get asked by clients now, more than ever if they should invest in their home.
Whether it be a full remodel or a few small projects, you always want to be mindful of what you’re spending and more importantly, why you’re doing it. If you’re not careful, you do risk the potential of over-improving your home.
Over-improving a home is when the cost of improving a property causes the total investment in the home to be disproportionate when compared to similar nearby properties.
At the end of the day, your home value at the time of sale will rely heavily on the value an appraiser gives it, no matter what your list price is. Appraisers go through rigorous training & certifications to ensure they use the correct formulas when they value a home for a buyer, especially when they are obtaining a mortgage. A low appraisal will cause another round of negotiations when the report comes in and possibly a larger down payment for the buyer.
That is another topic for another day but bottom line - Appraisers utilize comps to value your pending sale. They may give 20, if you are lucky, 30 cents on the dollar for your renovation work, but you will never get 100% back of what you put in.
This is why I am 100% honest with my clients: you MUST be mindful of resale values when doing tons of home improvement projects. Some projects DO increase value but some do not.
According to an October 2019 National Association of REALTORS® report, the two most popular home improvement projects were new roofs & kitchens. Following closely behind were closet renovations, HVAC replacements, new wood flooring, bathroom renovations and bathroom add-ons. As far as exterior projects go, the most popular projects were new vinyl windows, new vinyl siding, new garage doors, and new fiber-cement siding.
Here are my top 5 suggestions to increase the resale value of your home:
1) Update your kitchen - This doesn’t have to be expensive and, again, in general, you should not spend TOO much doing so.
Here are some updates that can completely update the look of your kitchen without blowing the budget:
Update your appliances
replace countertops & backsplash
paint (or swapp out) your cabinetry
install new lighting
2) Update Your Bathrooms - The best place to start is the master bathroom. Similar to the kitchen, a few small changes can make a big impact. Change out lighting & fixtures and install new drawer pulls & knobs. Just completing hese small projects can make a big difference. If its REALLY outdated, it’s possible that the best bet may be to do a full renovation but be mindful of the comparable homes & your budget.
3) Check Your Big-Ticket Items - This one may sting but take a look at the age & functionality of your roof, HVAC systems, & garage doors. Are they getting towards the end of their useful life? Are you properly maintaining them?
4) Consider Your Outdoor Space - Adding a deck, fencing in the backyard, and even putting in a pool are popular options that may pay off. Here in Florida, indoor/outdoor living is a BIG deal to buyers. Don’t get me wrong, not every buyer wants a pool, but a spot for entertainment, kids to play, and pets to run, comes up quite often.
5) Flooring - Flooring is big these days. Wood flooring is still in and can be very cost-efficient with the new “wood-look” ceramic & porcelain tiles out there. Many people are turning away from carpet due to allergies & the lack of durability. Go for the hard flooring & throw a rug down to soften up the look!
At the end of the day, sprucing up your home doesn’t have to be expensive, or a money-losing investment. Projects as simple as enhancing your curb appeal with general lawn care and a fresh coat of paint on the walls make a difference. Every home is different but in general, these are my go to’s.
I ALWAYS advise having a trusted real estate agent to advise you before you invest in any big-ticket projects. I am a local Realtor here in Tampa/St. Pete and you can reach me at 813-539-1678 or on Facebook & Instagram at Let’s Talk Tampa. If you aren’t local, I’m happy to connect you with a trusted agent anywhere across the country as well.
I hope these tips were helpful to you as you embark on all of the great holiday home improvement deals out there!