Guide to Maximize Home Value
Home Renovations with the Highest Returns
The best time to start thinking about renovations and repairs in order to maximize your home’s (read: asset’s) value is before you want to sell the property.
When you are at this stage, you should consider the costs vs. the expected returns when selling a home. Luckily, estimating the rehab costs is easy, but it’s slightly more difficult to determine how much the returns will be.
On average, home renovations only return approximately 57% on your initial investment, so you want to make sure you tailor an affordable rehab plan with an optimized ROI (return on investment).
The first step is counterintuitive in that rather than inspecting your home for necessary repairs, you should start by scouting the competition on the local market. Check Zillow, go to a few open houses and determine what the average “Finish” is in your market for different price ranges.
You should go see a few nice houses in your neighborhood and a few houses that could use some updating and get a feel for where your home lies on that scale. Then note where you would like your house to value at the end of your renovations and plan for renovations that will help you get to that goal.
Improving Curb Appeal
Everyone knows that first impressions are hard to break – and there’s nothing worse than an unappealing curbside view to turn off a prospective buyer before he or she even enters the home.
Curb appeal Is going to be a key influencer in order to drum up demand. Demand is key to getting the money you invested in renovations back – so make sure to generate demand by creating a visually appealing curbside view.
Some tips here include a fresh coat of paint for the siding, replacing the siding, replacing doors, etc. The return on investment can be greatest for this section of the home because the costs are relatively low and the increase in sales price resulting from these projects is quite large.
In the book Influence: The Psychology of Persuasion, Robert Ciadldini, PH.D. argues that:
“Once we have made a choice or taken a stand, we will encounter personal and interpersonal pressures to be have consistently with that commitment.”
This means that if you can make a good first impression with your home, it will be psychologically more difficult for prospective buyers to dislike the property after that point in time.
Adding a deck can recuperate almost 83% of its costs, which is one of the highest possible returns, according to Remodeling.net. Windows and siding replacements are also high up on the list of returns and warrant investigation when determining which projects to invest in.
Garage door replacements return a whopping 97% on the investment and lead the list in regards to efficiency for your money.
Want to get estimates on exterior rehab costs? Check Nailed-It.
Kitchens and Bathrooms:
While a deck is a nice addition, a minor kitchen rehab is one of the most practical and efficient investments that a homeowner can make prior to selling a property to maximize the home’s value.
In fact, a kitchen remodel, which can be priced out easily using Nailed-It can recuperate approximately 81% of the investment. 55% of potential homebuyers stated that they would be willing to pay more for granite counter tops – and the homebuyers said they’d pay $1,600 more for the home.
Bathroom remodels also return a significant amount compared to the value of the investment. According to Remodeling.net, a bathroom remodel is able to return approximately 70% of the initial investment. Don’t feel like doing the rehab work, but interested in selling? Reach out to us, we can help.
Flooring and Painting
Hardwood flooring is desirable and will increase the demand for your home. While the return on investment is not as flashy as some of the above values – it will definitely help to increase demand, which could help get the deal done.
Hardwood flooring is desirable to over 85% of buyers in the $100-150K range, and even higher numbers are reported as home values rise. On a side note, ceiling fans are as desirable as hardwood flooring and can help cement the deal; just a cheap potential investment to help sell a home!
Potential buyers have been found to be willing to pay approximately $2k more for homes with hardwood flooring – so make sure to take advantage of hardwood flooring if you have the opportunity.