Hey, this is Brian with BD Real Estate Solutions here in Kansas City. The question that we have been getting a lot lately is whether or not it makes sense to renovate your home prior to listing it. One of the questions that our clients have been asking is, if they do renovate their home, will they end up getting more for the home whenever it ultimately comes time to sell? So what I wanted to do was take a few moments to try to answer that question for you. Here are a few things to consider prior to renovating your home.
Some things to keep in mind prior to renovating your home is that the return on your investment is going to be a function of a few different things. First of all, what’s the current market like where you’re selling your home? Is it a strong market? Are houses selling fast? Do you need to have a home that has been fixed up to get the looks and get the offers that you’re looking for? Or is it the type of market where you don’t really need to do a lot to still get top dollar for your home?
Another thing that you need to keep in mind is where your home is located. What type of things are people looking for in homes these days in the area that you live in? You know, you could live in one part of the country and a certain type of flooring in the house is popular. You could live in another part of the country and it’s something completely different. So, you need to know what the local market is looking for whenever renovating a home.
The third and final thing that you need to keep in mind is the quality of work that’s going to be done on the property. I know we all like to think that we can go in there and fix up our houses ourselves and do a fantastic job, but unfortunately that’s not always the case. You know, you walk into a lot of these homes and you’ve seen the DIY work that’s been done, and that doesn’t stand out in a positive way. That type of work is not going to bring you more value for your home.!
What needs to happen is that the work needs to be done by a professional, or at least done in a way that it looks professional, so that way it ultimately ends up bringing you as much money for your home as possible, so that way you are getting a good return on your investment.
On average, there are certain projects that will bring a bigger return, and some of those are the addition of a new wood deck, window replacement, and kitchen and bathroom upgrades. Now, these typically show the greatest return on investment regardless of the location of the property. However, something to keep in mind that even though these have the highest rate of return, you aren’t always going to get all of your money back from these things, and most of the time, you’re not going to end up making more money on your investment than you put into it. That’s just unfortunately not how it works.
Another thing to consider is that homeowners need to be realistic when planning a renovation. Unfortunately, there are a lot of homeowners that go out and they spend all sorts of money fixing up their home, and they over improve it for the neighborhood, and whenever they go to list it, they’re expecting to get thousands and thousands more than the average sale price of the homes in their neighborhood and that just doesn’t happen. You need to improve your home to a level that is equal to, or just maybe slightly above, the rest of the homes in the neighborhood.
Buyers aren’t looking to spend 50, 60, even a $100,000 more on a home in a neighborhood where the prices don’t make sense. So you need to make sure that you are being realistic whenever you’re planning your renovation project, so that you don’t fall into that trap or that same mistake that a lot of other homeowners have made over the years.
So to wrap things up, the absolute best way to make sure that you are going to get the best return on your investment is to do some due diligence prior to starting any of these projects. If your goal is to sell the house, sooner rather than later, it makes sense to do your due diligence. Don’t just go off and decide that you need to remodel the kitchen. You need to remodel the bathroom. Do all of these things thinking that it’s going to drive up the price of your home whenever you go to list it. Because like I said earlier, just because you spend big bucks on something doesn’t mean you’re going to get big bucks in return.
So, speak to a local real estate agent, speak to somebody that’s an expert in the market, and make sure that these improvements that you are planning on doing actually make sense.
Like always. I’d love to help you out. If you ever have any questions, just let me know.