EDITOR’S NOTE: The following article summarizes the general consensus on where to focus your renovation budget, whether to prepare for a sale or for improving the enjoyment of your home. For a New York City renovation, superficial improvements such as updating the finishes and appliances in your kitchen, a nice paint job and careful remodel of the master bath, will provide the best return in the short term for a sale. Updating your townhouse or apartment’s energy efficiency, such as improved air conditioning, heating, insulation, and windows is money well spent if you plan on staying for a while. Removable improvements, such as a wine fridge or high quality furniture, also make sense if you plan on selling at some point in the near future. Read on for more details. -RJ Diaz
Selling or Staying: Where to Spend Home Improvement Dollars
by Ryan Poelman on August 18, 2015 via Huffington Post Home
It’s not hard to find articles about which home improvement projects will yield the highest payback in a sale. I checked on a few, and they all have pretty similar selections for high-payback remodels. I also found a couple of articles about what NOT to spend your money on. If the plan is to sell within the near future, there is a lot of agreement about which projects get the thumbs-up:
• Kitchen: This one tops the most lists, as the kitchen has become a popular gathering place for today’s lifestyle. If you’re careful and don’t go for a complete overhaul of an already acceptable kitchen, the payback is pretty good in resale. New appliances should be the top item on the list, then using the remainder of a conservative budget on countertops and fixtures is your best bet.
• Bathroom(s): Mostly we’re talking about the master bath, as it is the most important. Again, conservative spending on fixtures, tile, and a new bath/shower setup is usually the best approach. Spending $10k or more is usually less likely to pay back however.
• Walls and Floors: Paint, wall coverings, and new carpet are top of the list here. Painting in particular is inexpensive and gives a lot of bang for the buck at sale. Keep it muted though, as wild colors isn’t usually a good move. However, having different colors in different rooms can be appealing to buyers. New carpet is again a great investment, as it isn’t a big dollar layout. It definitely will appeal to buyers.
• Exterior and Curb Appeal: As far as bang for the buck in a resale, landscaping and exterior improvements are usually a good decision. Expansion outward is a good move as well. If you have a room facing a nice backyard, consider replacing windows with glass doors and then add a deck.
When it comes to improvements if you just want to stay in your home a while and enjoy it more, the top items have to do with energy efficiency and saving money. Upgrading heating and cooling equipment for efficiency and comfort is a good move. That exterior deck item above is also a desirable improvement for lifestyle enhancement and later resale. A hot tub is another nice investment if you plan to use it a lot.
You may think that this would be the place in the article to talk about a swimming pool. However, it’s really not a great decision when it comes to bang for the buck, even if you’re planning to use it and stay in the home a while. Let’s talk about what advisors are warning about home improvements:
• Swimming Pool: Though it isn’t probably going to return the amount spent on installation, there is another issue on resale when it comes to pools. As our society becomes more litigious, a swimming pool can actually detract from resale value due to concerns over safety and lawsuits.
• Very Personal Improvements: What I’m talking about here is money spent on things that few buyers will see as nearly as valuable as you do. Whether it’s a wine cellar in a middle class neighborhood or some other very unique improvement, you’ll likely never see a decent return on your investment. Instead consider a freestanding wine refrigerator that you can take with you.
• Over-Improving for the Neighborhood: Going all out and spending a ton of money to make your home the showplace of the neighborhood may feed your ego, but it will make resale difficult and you’ll never get your investment back. If your home is too far above the average home in the area, buyers who want to live there because of affordability won’t be able to pay up for your home. Those who can pay for your upscale improvements will likely make a financial decision to put that money into a more upscale neighborhood for resale reasons.
It really doesn’t matter when resale is in your plans, as most of these decisions are either smart financially or not even if you’re staying a while.
The article Selling or Staying — Where To Spend Home Improvement Dollars first appeared in Huffington Post Home on August 18, 2015.