We have been privileged to see some amazing custom home renovations over the years and enjoy seeing the upgrades and personalized touches that many of you have made.
But if we’re being completely candid (and when are we not?) not all renovations are going to see a return on investment. In fact, the more personalized and unique your reno, the chances are higher that you won’t recoup the cost when you inevitably sell your home. A positive return does not always matter to a homeowner but if it does to you, please read on.
Would You Pay for This?
I once had a homeowner who was considering investing $250,000 on an impressive limestone path leading to the Bay. He called me to see if he could expect to get that investment back if he sold. I told him likely not. He proceeded anyway because he wanted to do it. It was GORGEOUS. When it came time to sell, the good news was that he was not blind sided by not recouping that full investment. He enjoyed the new access to the water and loved his new path. For many the sting of not recouping is in being blindsided. When you know and proceed anyway it just hits differently when you sell. Yes, this is a true story from experience.
While this example might be a tad extreme, there’s no denying the risk that homeowners take when they renovate. The key is to ensure your renovations do not deviate too far from what the average homebuyer is willing to pay for if a solid return is important to you. Not everyone cares if they get the investment out.
Wise Investments That Will Pay Off
Cautionary tales aside, some house upgrades will almost certainly yield substantial returns.
Our #1 tip is to invest in a professional interior paint job. Not only will a Designer be able to tell you the right shades for your space (hint: it’s not obvious to us amateurs!) but a fresh coat of paint can be truly transformative when it comes time to sell. Read this article for a deeper dive into all things paint and color, and why we can’t recommend it enough. Paint is truly transformative. We have a great list of Designers we can recommend to assist you…Going rogue on this is highly discouraged. I have so many colors gone way wrong stories!
Seriously… if you stop here and don’t read any further, know that investing in professional painting is the best thing you can do for the resale value of your home.
The second best investment you can make is upgrading your lighting. Fresh fixtures and better bulbs significantly boost the resale value of your entire house. We love consulting the Salt Box in De Pere for professional recommendations. While you’re at it, put in new cabinet handles and hardware throughout your house. This investment really adds to a refreshed feeling.
Next, consider your carpeting. Even with better quality materials and installation techniques, most carpeting won’t last more than 7 to 10 years. In high-traffic areas of the home, you’re looking at around 5 years before a replacement is necessary. Replacing the carpeting in your house could really help make it more attractive to potential buyers. If you are doing so, wait until right before listing, especially if you have pets.
This next one might surprise you… replace the garage door! From clunky operation to a dismal exterior appearance, your garage door makes a strong first impression on a potential buyer. Replacing the garage door isn’t a big investment and it goes a long way when it comes to refreshing the exterior look of your home. It is the first thing people really see when they drive up. This investment is easily recouped.
When it comes to the “mechanicals” in a home – heating, ventilation, and air conditioning – at a minimum you should be keeping up with all regular maintenance and replacement recommendations. If your furnace is close to its replacement date, put in a new one before listing and you’ll likely see that investment recouped.
Next, consider replacing your roof if it’s getting to the end of its usable life. It takes a larger investment on your end, but there’s a good chance a buyer will pay more for a house with a new roof. Oftentimes this is recouped.
Lastly, take a look at your landscaping. A refresh can really help increase the attractiveness of your house to its new owners. Shrubs that are too mature really age a home. A nice fluff and buff really enlivens the exterior of a home. Do this a few years prior to selling so they have a chance to fill in a bit. If you have any dead or diseased trees they should be removed.
Remember that keeping up with the repairs and basic needs of your home are not usually recoupable as they are considered the price of owning a home. Deferred maintenance and home care will really decrease your sale price if they are not kept up on.
Many people wonder if they need to update their homes because the market is so active. The short answer is yes. A well maintained and current home will blow the average home out of the water. In any market.
Be mindful of the price range of your neighborhood. Being way above the values in your neighborhood can be risky.
Home Renovations That Bring Less Return
Being mindful of overdoing major renovation areas like kitchen and baths is helpful if you care about a return. Sometimes a total gut job is needed and sometimes it is not. For example, do you need to totally replace the cabinets or could you do a facelift? In kitchens, functionality, pantries, natural light, cabinetry space and islands are key. If you are doing a major renovation in high use areas be sure you will be living there long enough to enjoy the return.
Another area where many homeowners may misstep is over-customizing. Not every room needs to be its own show! Cohesiveness and a smooth flow from room to room matter, as they add to the appeal of your home. Again, working with a Designer to ensure flow is highly recommended.
Of course, we say all of this with love. Do what you want with your home… but we want you to go in with your eyes open. Every house will be put on the market eventually, and someday it will all matter. We are here to help!
What to Do if You’re On the Fence
Before beginning a renovation project, give our office a call (many people do). We are happy to give you an honest, transparent answer about what is (and isn’t) worth the investment from a resale standpoint. Our insights into market trends and buyer preferences are available to assist you in making a wise investment! Do the reno, invest in your home…You will be SO glad that you did.