After spending almost a year in our new home, my husband and I found ourselves spending nearly $20,000 just on home improvement projects. At the beginning of our venture, we’d begun saving money at the first of the year, dreaming about the day we would be getting our new granite countertops and state of the art shower; however, we had to settle for replacing the furnace and rain gutters, we also had to replace the sub pump in our basement and add some much-needed paint and landscaping to the outside patio. Towards the end of the year, once I’d scrubbed down my dull Formica counter and taken a shower in my old bathtub from the stone ages, I wondered if we had made a wise decision. After all, if we’d decided to sell our house, would the potential tenants of cared whether or not the sub pump or furnace was in good working order?
After I talked to several local realtor companies, architectural firms, and contractors, it was a definite go. “When you have a leaking roof, potential home buyers will steer clear of the residence,” according to Ron Phipps of Phipps Realty Company, located in Warwick R.I., “It doesn’t matter what shape the kitchens in.”
An article in Remodeling Magazine (http://remodeling.hw.net/) mentioned that you have a better chance at regaining your investment by performing home maintenance instead of doing major remodeling projects. For instance, replacing a house’s siding recoups 92.8% of what it cost, this is according to their study. The one home improvement project that’s more likely to provide a higher financial gain at resale is minor kitchen remodeling, which has a regain of 92.9%. Two other projects that ranked high on their list were window and roof replacement, with a return rate of 80%.
According to Sal Alfano, Remodeling’s editorial director, “Buyers usually want to take advantage of the basic methods.” Continuing on he states “Their natural assumption is that the furnace and plumbing work fine. Maintenance and repairs can take a toll on one’s pocket, which tends to scare people.
Not that it doesn’t pay off by installing a granite countertop or state of the art shower; bathroom and kitchen remodeling continues to be wise investments for a home. “They always are at the top of the list,” according to Alfano. “These are the prominent rooms which new home buyers tend to splurge on, especially when potential buyers are searching, after all, this is what they want as well.”
If you’re considering plunking out some cash for some home improvement projects this year, there are a few things you should keep in mind. What type of return can you expect on this investment depends on the home’s value, what is the going rate for homes being sold in your neighborhood, how fast you’ll be able to sell once these improvements are made, as well as the quality of work which was done. For instance, putting in a $10,000 refrigerator in a home worth $230,000, “simply doesn’t make sense,” claims Ron Phipps. It also isn’t sensible to remodel your kitchen if it’s the only one on the block with a single bathroom in it. Here are the top remodeling projects that are sure fired winners for getting you a greater return investment.
Bathrooms & Kitchens
Two of the best projects to invest in are bathroom and kitchen remodeling, they’ve been proven to be successful, in some cases bringing a return of over 100% of the total cost. For instance, there was a property in Baltimore that had its bathroom remodeled for $9,240 and regained over 100% of the investment at resale; this is according to a study performed in 2004 by remodelings. There has been a triple-digit return on bathroom remodeling investments in Chicago, Washington, D.C., Minneapolis, San Francisco, San Diego and Atlanta. Small kitchen remodeling projects averaging a little more than $15,000, also gained returns of over 100% as well, which includes areas like New Orleans, Miami, Providence R.I., and yet again, San Diego, where an investment of $18,000 regained a whopping profit of more than $10,000.
Bathrooms and kitchens are two prominent areas of a home “where one can tell whether or not a good deal of money has been invested,” according to architect Steve Straughan, who is associated with Los Angeles based KAA Design Corporation. “These tend to be more expensive home improvement projects. And are the two places where people spend the most time.”
What are some improvements you should make when renovating your bathroom and kitchen? Think modernized: solid wood cabinets, appliances with the professional appeal, high-quality stone countertops or floors. According to Straughan, more people are trading in their step-in showers for whirlpool tubs. His customers have “removed their tubs for large walk-in shower units,” that is if they’ve not much room to work with. “Most people don’t take baths nowadays,” claims Straughan. “So it’s useless to take up all of that space in which you’ll hardly use anyway.” Another popular item is full-length steam showers. However, there are two things to consider: First of all, don’t spend an extravagant amount of money renovating your bathroom if you don’t have any others in the house. It’s better to take the money and install a second bathroom. A lot of people prefer “the quaintness of older home décor,” claims Dick Gaylord, a Long Beach, California based realtor. “However, a lot of older residences don’t have near enough bathrooms. Therefore, if you have a house with multiple bedrooms and just one bathroom, it’s worth the extra money to get some others installed.” A study was done by the University of Florida Professors, David Macpherson and Stacy Sirmans, putting an additional bathroom in a home increased its value by more than 90%, which is twice of what one gets for adding an extra bedroom.
Next, if you don’t plan on moving anytime soon, remodel in a way in which is more ideal for you. Realtor Ron Phipps presented a kitchen that he’d remodeled within the last two years. “I undid the Viking range, and its authentic box was still there,” claims Phipps. The residents “aren’t professional chefs. No matter how great it is, they just aren’t compelled to be there.”
Therefore, you cannot put a value on the amount of enjoyment or use you receive for improvements that have been made. “Regardless whether or not you get back a regain of 100% of the money which has been invested, you’ll still have extra room to work with,” claims Sal Alfano.
New bathrooms and kitchens lose their appeal when a potential home buyer walks through and comes upon a flooded basement, claims Alfano. The priority of a homeowner should be “having a sound structure,” claims Don Sever, an eighteen-year general contractor who’s the president of the Server Construction Company located in Oakton, Virginia. “I have visited numerous homes in which the owners plunk out thousands of dollars just to remodel their kitchen, however, when I travel down to their basement, it is in chaos and turmoil. It seems to me that it’d be more sensible to fix any issues before considering having a home remodeled.”
According to Ron Phipps, you should place yourself in the shoes of the potential home buyer. “Recently I was with a person who’d wanted to spend a ton of money on bathroom renovations. However, their roof was in shambles and appeared to be ancient.” A potential buyer will find a damaged roof of more importance than having a pretty bathroom,” claims Phipps.
Most potential home buyers have a limited amount of money on which they can spend. If this is the case, they are more likely to purchase the property if everything is up to date with repairs, regardless whether it’s remodeled or not. Over 70% of people who bought existing homes already have a good idea of what changes they want to make, before closing the deal, this is according to HanleyWood’s Condominium Study, which was conducted in 2002 along with the Harvard’s Joint Center for Housing Studies.
The Bells and Whistles
Some individuals searching for a house aren’t always out to make a profit, they are looking for a place to call home!