Part of the dream of homeownership is the endless possibilities.
During your years of renting, your creative intuition was held back. You couldn’t paint your apartment interior green or do what you really wanted to with your front yard. As a homeowner, you now have nearly unlimited freedom to change everything from the home’s floor plan to the finishes and fixtures on your cabinets and counters.
So if you’ve just got to have that slate flooring or fashionable new carpet, you can remodel to your heart’s content. But beware – not all home improvements are created equal…
One man’s hardwood floor is another man’s shag carpet
That’s why home improvement projects often fail to add value to a home. Sometimes they can even deter buyers or leave them with a bad impression.
If your home improvement caters to a specific taste or provides some kind of luxurious amenity that doesn’t quite fit your area (like installing a gourmet French kitchen in a rough part of downtown), then you could be spending a small fortune to improve your personal quality of life – without really improving the actual value of the home.
Given the proliferation of home improvement ideas and articles now available everywhere online, it’s also hard to find the balance between projects that are cost-effective and also provide a positive return on your investment in the home’s sale price.
For example, if you enjoy swimming and build a top-of-the-line pool with remote lights, waterfalls, and a connecting spa, you may be happy spending six-figures in the process.
Unfortunately, you shouldn’t expect to recoup the total cost of that project when it’s time to sell your home. If you’re fine with a modern, somewhat plain, but not over-the-top pool, you can save thousands in renovation costs without missing out on adding substantial value to your home.
With that in mind, let’s look at the top Do’s and the Don’ts of home renovation, starting with high-priced projects to skip …
Don’t Skip the Kitchen & Office
Home renovation projects often start in the kitchen. They often stop there, too.
It’s the most expensive room in the house to remodel. Upgrading the lighting may require an electrician. Updating the layout will require serious plumbing work. Getting top of the line stainless steel appliances could set you back five figures depending on the bells and whistles you want, and that’s to say nothing about the flooring, new granite countertops, or the cabinetry.
While a dream kitchen may be wondering if you’re inclined to spend long hours preparing gourmet meals, the average family is looking for a space that’s simple, and easy to use (and clean).
The average remodel runs about $23,000 for a modest 200 square foot kitchen. That works out to $115 per square foot. In some parts of the country, you can pay less than that for a decent home.
A top of the line kitchen upgrade to the latest and greatest could run over $60,000 if you’re adding an island or other substantial improvements. That’s more than the average American family earns in a year!
Given that a newly remodeled kitchen adds around $15,000 to a home’s value, this feature is just about guaranteed to lose money. And that’s not factoring in all the fast food you’ll be eating on that beautiful granite countertop. Again, if you really want a top of the line kitchen in your home, feel free to create a space that works for you. Just don’t expect a return of your money when it’s time to sell the house.
Likewise, home offices have become more prevalent in recent years. With an increase in telecommuting, a second job, or a need for space to work, spare bedrooms have been converted into home offices.
But, again, that’s not what a buyer’s necessarily looking for. A bedroom that’s been wired for lots of electronic devices and features built-in space may involve substantial costs to restore the space to a plain, simple room.
Estimates are vague since home offices aren’t as prevalent as a kitchen—yet—but the numbers aren’t good. These spaces add little value to a home to prospective buyers, and in some cases may be a turnoff.
Do Give a Good First Impression
A prospective home buyer sees the outside of the home first. That’s true whether they’re looking at photos online or driving through a neighborhood. A good first impression—that critical curb appeal—goes a long way.
That means a crisp, uncluttered yard, ideally a reasonably fresh coat of paint… and the most critical, but overlooked, value-add of all—the front door.
Research indicates that a new door—which you want a buyer thinking of as their future front door—can add as much as $24,000 to a home’s value.
But here’s where that’s a great return. It’s a small project, and likely a do-it-yourself one. And it can be done for less than $500. If you install fancy double-doors with higher quality locks and stained glass, the price could top $2,000. But it’s harder to find a better return on your money when improving your home. Even if you’re not planning on selling, a new door can make the whole home feel fresh and new again.
Doors have, interestingly, also advanced with the times. Old, warping wooden doors should definitely be replaced, either with fiberglass doors with insulated cores or with steel doors. Both are stronger, more resistant to warping, mold, mildew, and discoloration over time compared to wood.
After upgrading the gateway to your proverbial castle, it’s time to look at upgrading the throne room.
The conventional wisdom is that a bathroom upgrade won’t add value to the home’s resale value. For high-end improvements, that’s likely true. After all, it’s a small room. A top of the line bathroom with all new appliances may add only $5,000 or $10,000 to a home’s value… when it could easily cost twice as much to refurbish.
But for a thousand dollars or less, you can make significant improvements by updating the mirror, faucets, caulking, and maximizing counter and storage space. That can take a dated space and make it look respectable. While it may lack the full effect of a complete remodel, most homebuyers aren’t looking for over-the-top extravagance in a bathroom, particularly compared to a room like a kitchen.
So a simple refurbishment can provide a huge return for a small outlay of money… and your time. After all, the best part about these renovations is that you probably won’t need to hire a professional to handle these simple tasks.
Even if you’re not looking to cash out your home and move on, at some point you’re probably going to want to update your digs. Most home changes don’t require major renovations. And a new buyer may want to make their own imprint on the place. Stick with a few simple, easy-to-perform projects, and you can save thousands in costs while still adding value.