Why It’s Critical to Choose Your Home Renovations Wisely

3/14/2020

Renovations may seem like a logical way to add value to a house when getting ready to sell, but the truth is that many renovations recoup less than 50 percent of their original value. A buyer often sees renovations as something that makes a particular house worth buying, but not something that warrants paying over market value, or even market value in some cases. Not all renovations are made equal, and certain renovations definitely pay off more than others.

Focus on These Rooms

Kitchen remodeling and bathroom remodeling are the most likely to recoup their price, which is up to 80 percent in some cases. A kitchen renovation that replaces old, colored appliances with stainless steel is attractive to buyers and creates a classic, fresh look for the kitchen. Granite countertops, re-stained or repainted cupboards, new knobs and handles, and a fresh paint job in a neutral color are also fantastic kitchen renovations that capture buyer interest and justify a higher price tag.

The bathroom is the next area to focus renovating dollars. Spa style bathrooms are in demand and adding a two-person tub to a master bathroom is a good way to add value. Replacing or repainting cabinetry is another good option and if the floor is worn, replacing it with tile is an attractive option. However, if room or money is lacking for a complete bathroom upgrade, simply adding a fresh, neutral paint job and replacing old handles and knobs can give any bathroom a fresh look.

Other Quality Renovations

The value of a new paint job cannot be overlooked when renovating a house. Outdated or outlandish colors can easily turn off buyers whether on the exterior or interior. A fresh paint job in a neutral color can make any house look newer and more inviting. Paint jobs usually recoup 60 to 70 percent of their value.

Flooring upgrades and the addition of central air conditioning are also popular renovations. However, both of these are high-ticket items and typically only recoup 50 to 60 percent of their original value. Potential sellers should look at these on a case by case basis to decide if they are worth the money.

In areas with warmer climates, a patio or outdoor deck space can add attraction and value. Prices on these upgrades vary widely but can recoup up to 50 percent of the original value. Fireplace additions can also recoup about 50 percent of their value, whether it is through adding an insert or simply repairing and refreshing the existing area.

Renovations to Avoid

Renovations that typically recoup less than 50 percent of their original value include new windows, professional landscaping, a finished basement, energy efficient items, and new heating systems. The problem with all these renovations is that they often fall under the umbrella of expected repairs. Buyers expect outdated windows to be replaced, they expect a landscaped yard and in many cases, they expect plenty of energy efficient features. A buyer sees these items as making a house worth buying, but are not likely to see them as being worth more money. If your house is in need of these renovations, you may want to consider doing them to get market value for your house, but do not expect to recoup much of your expense.

Another category of renovations to avoid are the ones that cost a lot of money but are not expected by buyers and don’t add much value to your house relative to their cost. These include the following:

• An upscale grand entrance
• Pools
• Wood-framed windows
• Closet remodeling
• Master suite addition
• Sunroom addition

If you’re planning to renovate your house with selling in mind, it’s important to implement expected repairs and upgrades. However, when it comes to adding value to your house beyond its average worth, you want to pick renovations that will recoup a decent amount of your money. Flooring upgrades, bathroom and kitchen refreshes, new paint and the addition of central air are all good investments.