It’s the question facing every homeowner considering home renovations or remodels: What will my return on investment be if I sell my house? There isn’t a definite answer, it depends on many different factors. But despite the murky waters, it’s important to have an idea of what your improvements might be worth. According to a report by the Joint Center For Housing Studies of Harvard University “Spending on home improvements is projected to strengthen in the majority of the nation’s largest metro areas in 2017, with many markets in the East and Midwest expected to post double-digit annual growth.” This means many American homeowners will be asking themselves this very question.
Remodels that Return
Visit a few open houses, watch any home buying show on TV, what’s the thing that has every potential buyer oohing and aahing? Kitchens and baths. The majority of buyers want a house that doesn’t require a bunch of costly face-lifts right away. So these buyers are looking for a house that doesn’t need any kitchen or bath renovations. While these remodels can be costly, they’re more likely to have a higher return on investment.
If you’re looking to sell in the near future, shy away from installing pools and home offices, because a lot of buyers aren’t willing to pay more for a house that comes with “useless rooms” and “extra maintenance”. And just because a project is expensive does not mean it will pay back more. Minor improvements will return more than a full redesign. Think face-lift – painting, refinishing surfaces, and upgrading appliances.
Keep in mind that you could potentially sell someday, so try to opt for styles that last. “You might want a room in your house in the shape of a cat or a mouse, but can you find a buyer who wants it?” says Gopal Ahluwalia, director of research at the National Association of Home Builders. If you’re living in a midcentury modern and want to add on a family-room addition, keep the design in harmony with the original building. Same ceiling heights and window styles will keep the integrity of the house. The same is true of small projects, too. When choosing new tile for your kitchen backsplash, aim for common or neutral colors and styles. Don’t expect someone else to dish out for your distinctive and particular choices.
You have to consider your neighborhood when remodeling. Don’t expect a high return if you’re neighborhood doesn’t have similar upgrades. You never want to be the most expensive house on the block. Do your research with the surrounding homes of similar square footage and room counts. If there’s an open house in your neighborhood, go check it out, see what improvements they have made (or haven’t) and look at what they’re selling for. This will give you a good idea on what remodeling projects will give you a return in your area.