Remodeling your home in a way that makes it more functional and enjoyable for the next couple of decades is usually worth any reasonable expense and effort. But what if you are planning to sell your home sooner rather than later? The fact is, few large-scale remodeling projects add enough equity value to your home to realize a profit, let alone break even, when the house is sold.
But that doesn’t mean that all improvements prior to selling are a bad idea. There are plenty of home upgrades that will help you sell your home—and perhaps at a higher price—without a risky investment. The best approach is to follow some industry rules of thumb and to do some research before committing to a project.
Tip 1: Consider Break-Even Remodels to Attract Buyers
It’s not necessarily a success to spend money on a bathroom remodel only to recoup the same amount from the sale. However, if your home has a critical area (such as a primary bathroom or a kitchen) that causes potential buyers to turn on their heels and walk out the door, a redo might be worthwhile. Even if the rest of your house is in acceptable condition, one unattractive area might drag down the rest of the house.
Real estate agents often advise clients to take care of minor problems, all with the understanding that the fixes serve only to support the sale of the rest of the house. Surface bathroom or kitchen remodels are often a better solution than a full-scale remodel. One important point to remember about break-even remodels is that they still do come at a cost: the price of your time and effort.
Tip 2: Update the Kitchen and Bathroom—As Needed
Real estate pros stress that the kitchen and bathrooms are the most important parts of the house, but that doesn’t mean you have to completely overhaul those rooms before selling. To decide what’s best in your situation, start by looking at the numbers. An upscale major kitchen remodel has a return on investment (ROI) of less than 60 percent, while a mid-range minor kitchen redo can return about 80 percent. Bathroom remodels return about 62 percent for upscale renovations and about 67 percent for mid-level remodels.
Looking at the numbers alone, it rarely makes sense to spend a lot on kitchen or bathroom renovations just to sell your home. However, because these are such high-profile areas that buyers pay a lot of attention to, there is a good deal of value in an inviting kitchen or bathroom—or at least a room that most buyers will feel they can live with. If a kitchen or bathroom is woefully outdated and unappealing, buyers may automatically add the cost of renovating it to the cost of the home. And if the home cost isn’t low enough to compensate, the buyers may run.
On the other hand, if the kitchen and bathrooms seem nice enough to leave as is (at least for a while), buyers won’t automatically add the cost of renovations to the sale price. Therefore, it usually makes the most sense to remodel kitchens or bathrooms, as needed, so they are reasonably modern and inviting, if not spectacular.
Tip 3: Concentrate on Countertops
Countertops are highly visible. So if you opt for any kind of expensive rip-and-replace work within the kitchen or bathroom, the countertops are a good bet. Just keep in mind that countertops are a very personal choice. Just because you love the look and feel of granite doesn’t mean most of your potential buyers will agree. Some people prefer laminate, some like a solid surface, and others dream of new quartz countertops. This means that you shouldn’t spend a great deal on a new countertop with the assumption that it will be a universally valued feature.
Tip 4: Refresh Cabinets Rather Than Replace
Kitchen and bathroom cabinets are highly visible because they are at eye level. But replacing kitchen cabinets can easily erode any profit you hope to realize from the home sale. If your kitchen cabinets are in terrible condition, especially with the cabinet boxes falling apart, you have little choice but to install new cabinets. For cabinets that are in good structural shape, the better option that will return more value is to paint your cabinets or even reface them.
Tip 5: Upgrading Fixtures and Hardware Pays Off
New room fixtures and hardware are surprisingly effective as kitchen, bedroom and bathroom upgrades. Do not assume that replacing kitchen and bathroom hardware is going to be cheap, though. Replacing all of your hardware can easily run into hundreds of dollars. On the upside, new fixtures and hardware are an easy do-it-yourself project that you can take on, even if you are in a time crunch. You can replace your kitchen and bathroom hardware in a few hours.
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