Are you thinking about doing renovations? You must first ask yourself, WHY? Then WHAT, WHEN, and WHO? Always start with the WHY - Why do you want to renovate? Are you wanting to add more value to your home to sell or are you planning on staying for a while? These questions can help you decide what to do, when to do it and how to spend your hard-earned money.
If you are wanting to add more value to your house for resale, start with the easy things.
Paint will always be the cheapest and go the furthest if you want to add quick value. Spending around $10K on paint can add an additional $15-20K in sales price when using a professional painter.
Flooring updates are next in terms of value and bang for your buck. You do not have to go wild on flooring for resale. Just adding new carpet, engineered hardwoods or even luxury vinyl plank can almost guarantee a doubling of your investment for resale. If you are not planning to sell, then do what you love for your flooring. Just do not go too crazy because the recoverable investment diminishes with cost. This is mainly because most people could not tell the difference in a $4/sf carpet vs a $20/sf carpet. All they see is new carpet when they are buying.
Kitchens and bathrooms are next up on the list. These are the ones that bring the most return on your investments but also cost you the most initial investment. A major kitchen renovation can cost hundreds of thousands of dollars. Again, if you are not planning on moving and doing it to for your own enjoyment then do what you like but remember if you spend $100,000 on the renovation it may not all be recoverable in most markets. What I have seen in the last few kitchen renovations that we have done assisted with is that spending under $50,000 can give you an incredibly beautiful and functional kitchen and get you the best return on investment when selling. Bathrooms are the next in line and the owner's suite always comes first. Plan on spending $10,000-$20,000 here to make money on your investment. Updated showers and fixtures are necessary and can cost the most as well. Doing the right things in the owner’s bathroom can more than double the investment. Secondary baths should only run around $5,000- $12,000 each but remember to keep it simple on these. Most buyers do not seem to add as much value to the secondary baths. Your return on investment is positive but only 10-25% for secondary baths.
Room addition, adding square footage and renovations to the entire house are a whole other animal. Here you are talking about hundreds of thousands of dollars, and these are done for you and your needs and not the future buyer. The recoverable percentage is below 10%.
If you are not planning on moving for 10-20 years…. Do what you want to enjoy your house but remember that most of the renovations may need new updating when you are planning to sell. Keep your budget in mind but you do not want to outdo the values in your neighborhood. A hundred-thousand-dollar kitchen in a three hundred-thousand-dollar neighborhood will never bring you the return on investment. If you are planning to sell in the next five years wait a couple of years to make sure no latest trends are out. Then renovate, enjoy for a few years, and then sell.
But WHO will you trust to renovate? As realtors, we have seen many people get taken advantage of because they do not know the prices to do renovations. Always use a professional contractor you trust. You can always call a local real estate expert (like Wilson Realty Team) who does business and knows people to do all the renovations. Most local real estate agents have a list that they are happy to give to you of contractors and vendors who are reputable and trustworthy. Never pay upfront the full amount of the renovations. Any reputable contractor will only ask for a portion of the payment upfront and remainder when the job is complete. This should be a big red flag for an unethical contractor.
Wilson Realty Team is always here to help with any suggestions, advice, or recommendations for contractors for any renovation project! Reach out at realestate@theteamwilson.com.