Renovate Your Home without Exceeding Neighborhood's Value
Before you decide to renovate your home, it’s important to understand that not all renovations will increase the value. It is certainly possible to over-remodel, and you don’t want it to exceed the value of your neighbors’ homes. Here are some ways to get the highest return on investment (ROI) possible when the time comes to sell your home.
Projects always worth your while
There are specific renovation projects that can deliver the greatest effect on your ROI, regardless of the real estate market’s current state or the value of surrounding homes. According to real estate expert Robert Stammers in a recent article in Investopedia, these can be projects such as an addition of a wood deck, kitchen and bathroom upgrades as well as window replacements.
Factor in location
A common mistake that homeowner tend to make is renovating their homes to the point where it exceeds the value of surrounding homes. The fact of the matter is that people look in a specific neighborhood because of its proximity to nearby businesses or recreation and it’s in their price range. If improvements done to your home are much higher than homes around you, it’s unlikely that they’ll want to pay more for those improvements, even if they’re interested.
Make improvements that will add value over time
Some home improvements, like upgrading the technological features of a home, will not have a lasting impact, and may even bring down the home value. These types of renovations are at a higher risk of becoming obsolete and outdated as years pass. Technology and styles change all the time, so focus on improvements that are less likely to be impacted by time and are worth your investment.
Renovations that will pay you back
Regardless of whether a homeowner is planning to sell or not, the ultimate objective of taking on a renovation is to revel in the enjoyment you get from living in an updated home while gaining considerable profit from that investment. There are many tools out there that show the kind of profit you can expect from specific home remodels. A perfect example of this is Remodeling magazine’s “Cost vs. Value” annual report.
Here are some of the findings from the 2015 Remodeling Cost Vs. Value report:
Projects that deliver the highest percentage of return on investment
Entry door replacement (steel): 101.8%
Garage door replacement: 88.4%
Siding replacement (fiber-cement): 84.3%
Siding replacement (vinyl): 80.7%
Deck addition (wood): 80.5%
Renovation projects that deliver the lowest percentage of return on investment
Sunroom addition: 48.5%
Home office remodel: 48.7%
Master suite addition: 53.7%
Garage addition: 54.7%
Bathroom addition: 57.8%