When you prepare your home for sale, you likely want to minimize the amount of money you need to invest in order to ensure a sale. Ideally, your buyer would just materialize with an offer and little effort on your part. Unfortunately, buyers have a lot of options in today’s market and will pass on your home if it needs too much work in order for them to live in it comfortably. Accordingly, sellers are finding it increasingly necessary to tackle renovation projects before they put their homes on the market.
The decision to renovate, however, must be made carefully, as few renovations return anywhere near 100 percent of your investment. A kitchen remodel — the holy grail of projects for desirability and return on investment — only returns 80 to 90 percent of value. Now, without the remodel, you might not get any offers, which makes true ROI difficult to calculate. The goodwill or intangible aspect of making a home more attractive is hard to pinpoint. Here are some popular renovations and how to calculate your investment ROI.
Adding Up Your Profit
Determining potential profit is key to deciding what jobs to undertake. Make sure you organize and plan the renovation process carefully, keeping tabs on all expenses. The simple calculation is to add your total cash outlay together, including your investment in acquiring the home and renovations, then subtract this from the funds you net after the closing. You can project these costs and expenses by discussing the sale transaction with your attorney or real estate broker.
Simple Projects Often are the Most Impactful
Buyers want homes that have their desired features, such as room count, but they also want a blank slate in which to insert their stuff and family. The best way to make your home show well for these buyers is to repaint in a neutral color palette. Aim for a color somewhere between grey and beige, and make sure to add white contrasting trim to doors, window sills, archways, and baseboards. Avoid loud colors, with the exception of your front door, where a statement color, such as dark blue or red, can make your home stand out and provide a good curb appeal.
Decluttering your home is another impactful project. By getting rid of any unnecessary items, you allow potential buyers to see themselves in your home and not just your stuff. Of course, there is one drawback: the amount of dust declutter can kick up. In addition to doing a deep cleaning after you’ve eliminated the clutter, consider switching to a high-quality air filter, which can remove most allergens, pollutants, and other unwanted particles.
Landscaping can be another cheap and simple project. Adding mulch to flower beds can cost nothing more than $100 and a Saturday morning’s effort. Pay a little extra attention for bonus curb appeal. Make sure your front lawn is well-groomed, and edge flower beds. Prune trees and trim back bushes away from your house. Minimize everything for a clean look but also to satisfy buyers who want a garden but not all the work involved in its upkeep.
If you really want to go the extra mile, you can have a new fence installed on your property, which can be a significant perk for home buyers if they have kids or pets. Installing a fence runs $2,751 on average, depending on its size and which type of wood you use. If you need an older fence removed before installing the new one, it will usually cost you $2 – $5 per foot for removal and disposal.
Major Retrofits in the Bathroom and Kitchen Can Pay Off
If your kitchen and bathrooms are dated, buyers will be turned off. Avoid this with a basic budget upgrade of these areas. For a small budget, you can add a backsplash to a kitchen, replace an appliance or two, update your cabinet hardware (new knobs cost anywhere from $2 to $20), and upgrade your kitchen faucet. In the bathrooms, paint your vanity cabinets a fresh color and replace faucets and showerheads.
For a larger investment, upgrade cabinets and countertops to the latest styles to impress buyers. The current trend is exotic wood cabinets and quartz surfaces over maple and granite of the 2000s. Remember, though, that the ROI on these projects typically are less than 100 percent, and you may run a risk of over-improving your home if you get too ambitious.
Think Energy Savings
If your home is older, you can increase the ROI of renovations by adding efficient windows, insulation, and energy-efficient appliances or HVAC units. Buyers love any renovation that saves them money over time, so you will be able to reap a benefit via an increased offer.
Don’t Forget This Final Expense
Whenever you’re having work done on your home, it’s important to find a safe place for your possessions so nothing gets damaged or broken during the process. If you don’t have a garage or shed to place these items in during the remodeling, or they are simply too full to accommodate anything else, look into a temporary self-storage unit.
Increasing the value of your home will definitely take some effort and hard work, but the end result will be worthwhile in the long run. It’s important to plan everything carefully so you don’t end up decreasing your property value in the process.
Author-Suzie Wilson
Photo Credit: Pexels
