Will Your Home Renovation Really Pay off?
Here’s the dirty little secret about home renovations: Some of them may not pay off. Of course, the value of a renovation doesn’t depend on the resale price alone, which makes deciding whether to do one more complicated than just crunching numbers. For anyone trying to decide whether to take on a home renovation, these simple tips can help:
Is it Appealing to You?
Homeowners can get a lot of value out of renovations before they even put the home on the market. If you have a dated kitchen or the stove doesn’t work, you can invest money now to glean some enjoyment as well as make the home more appealing when you sell it.
Maintenance vs. Renovation
If a roof needs to be fixed and the owner replaces it, sellers look at that as routine maintenance rather than a renovation. That means it might just help the home sell for its existing market value, as opposed to adding extra value. Similarly, if parts of the home are in disrepair and in need of maintenance, sellers can subtract the cost of those upgrades from what they consider the home to be worth.
Cheap Upgrades Count
Realtors don’t slip apple pies into the oven before an open house just in case they get hungry; inviting smells, sights, and sounds are known to put buyers in a home-purchasing mood. Many prospective buyers form an opinion just by walking up to the front door. If potential buyers see weeds, broken sidewalks, and unkempt shrubbery, then they might not even want to go inside. But if they see a well-cared-for exterior, they might get excited about the property before they even see the kitchen or master bedroom.
Cleaning Up vs. Bigger Closets
Buyers like to see clear spaces without a lot of clutter. Some sellers make the mistake of trying to make bedroom closets look bigger by moving clothes into the basement, but that just shows buyers that the closets aren’t sufficient. Sellers should consider getting rid of clothes and other items they no longer use to make their homes seem bigger, without doing a single dollar’s worth of renovating.
Walk into your home as if you were the buyer. What are the things they see walking up to the home?” Today’s buyers are especially interested in common spaces for the family to gather, such as screened porches and family rooms, as well as open-floor plan kitchens. That way, parents who are preparing meals can keep an eye on their children as they play or do homework. Buyers also care less about formal spaces today, which means a formal dining room could offer more value as a study or playroom.
The bottom line is home renovations aren’t just about the numbers, but a few basic guidelines can help sellers decide where to put their cash.
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