Hoping remodels boost resale value? Do this, not that
Experts say most homeowners will never see a full dollar-for-dollar return on their investment in home updates or additions when they go to sell their improved abode. So contractors, appraisers and real estate agents generally advise undertaking significant updates for reasons such as upkeep and maintenance and to improve a home’s livability, instead of resale value alone. That said, when a “for sale” sign goes up in the yard, some renovations tend to provide more bang for the buck than others.
In addition to a new front door, garage door and wood floors, here’s a list of five updates that provide the best return on investment based on interviews with highly rated service providers and industry research, including Remodeling Magazine’s “Cost vs. Value 2014” report:
•A wooden deck. “Decks are popular these days,” says Robert Criner, vice chair of the NAHB Remodelers, which represents the interests of the National Association of Homebuilders’ remodeling industry members. “People like the outdoors," adds Criner, who is founder of highly rated Criner Remodeling in Newport News, Va. We also apparently prefer real wood, which tends to provide a higher percentage ROI than composite.
•New siding. Replacing vinyl siding with fiber cement siding reliably raises a home’s value, says Emanuel Coehlo, owner of Innovative Contracting Services in Cambridge, Mass. That provides improved durability, a longer life than vinyl, and aesthetic appeal that increases curb appeal, experts say.
•Window replacement. Clearly. In addition to enhancing appearance, Jim Tegge, owner of highly rated Home Crafters Building & Remodeling in Glenshaw, Pa., says installing new windows improves insulation — a selling point for would-be buyers.
•An attic bedroom. Go above upstairs for sleeping quarters and you’re likely to get more for your home when you sell.
•A kitchen remodel. Small changes, like granite countertops, can make a big difference. “The two main rooms that women look at that sell homes are a nice kitchen and a nice master bath,” Tegge says.
On the home flip side, here are five remodels that don’t give you as much back for your money.
•Sunroom addition. The average return on investment? “Fifty cents on the dollar today,” Criner says. “But if you’re the one who wants the sunroom, you’re probably not going to worry about that.”
•Turning your garage into living space. “The majority of buyers would rather have a garage and they always ask me, ‘How hard is it to put that back to garage space?’” says highly rated Realtor Petra Richardson, with Home Team of America, in San Antonio.
•Adding (tiny) bedrooms. Save for an ample attic bedroom, subdividing existing spaces into sleeping quarters to increase a home’s bedroom count can backfire when put your house on the market, Richardson says, creating functionally obsolete spaces without enough closet room. “I’ve seen this quite a bit lately, a bedroom without a window … like little cages.”
•Home office deluxe. Write this down and stick the Post-it to the desk: You’ll recoup less than half what you invest remodeling this space. That’s according to national averages captured in the latest “Cost Vs. Value” report.
•The large-scale landscaping project. A nicely manicured lawn and spruced-up landscape, especially around the front entrance, can help you sell a home and even fetch an inspired asking price. “[But] I’ve heard people say, ‘I dropped $20,000 into landscaping,’” says highly rated appraiser David Roberts, based in Columbus, Ohio. Based on his professional experience appraising homes, he says, “That probably didn’t add a dime to the property.”