Recently, several friends and others have told us they are either considering, or are in the middle of home renovations. Of course, in our roles as REALTORS® the first question seems to be "Will it increase the value of our house?" followed quickly by "What would you recommend?"
Those are loaded questions, but are legitimate queries. The answer is a wish-washy "It depends."
Pretty vague we know, but it really does depend. Questions you should consider first are:
- Why are you doing renovations?
- When you tie the work to the value of your home, when do you expect to sell?
Let's look at the two avenues - fixing up to sell or fixing up to enjoy
If you are looking at selling soon, and you feel that you want to increase the value of your home to maximize your return, then what you do has to be very well thought out.
Renovations almost always go over your initial budget for one reason or another, either in terms of time or money, or both. And, not every change or upgrade gets you a net return on the money invested.
According to Buffini and Company, the best Return on Investment (ROI) is simply a fresh coat of paint. With an approximate return of 300%, it blows away any other renovation investment. Upgrading kitchens and bathrooms are next, mostly because it is those two rooms that a lot of home buyers fall in love with first. From there, most ROI for renovations goes into a break-even or net loss.
With the ever increasing popularity of TV shows like Property Brothers, it is easy to start thinking about redoing your home. For those who are not familiar with the show the premise is that people buy homes within a budget, with the help of twin brothers who conduct terrific renovations, to create a fantastic dream home where a fixer-upper stood before.
This is a very addictive show and has been well done. But remember why people are doing the renovations through these brothers in the first place - to get their dream home, not to flip the property.
If the goal is to increase the value of your home so you can sell quickly, focus on the basics such as painting and other minor repairs that increase the instant likeability of the home to prospective buyers. Do some yard work and make your house's curb appeal better. If you are not sure what to do, ask your REALTOR® for recommendations. They can provide objective market-driven feedback to equip you to decide, with the end goal of maximizing your profit.
If that is not your goal, then the ROI may not be as big an issue. In that case, do what the TV twins do, make the home your dream home for today. Make any changes for your enjoyment and not for the enjoyment of the next home owner.
Always keep in mind though that if you are not going to have this home forever, make sure renovations are not so bizarre that the home has to be re-renovated just to sell in three years.
Remember, if you are not an experienced DIYer and cannot make the renos look professional, bring in those that can!
Buyers notice the flaws and wonder what lies beneath.
To reno or not to reno, that is the question. The answer lies in your reason why.