Today’s real estate market is hot, which means that now might be the perfect time to get your home ready to sell. If you want to perform a large-scale home renovation, note that it could affect your property value. Below is a look at some of the best and worst renovations when it comes to their return on investment (ROI).
Renovations that can lower the value of your home.
The old real estate saying, “kitchens and bathrooms sell homes” does still apply in today’s market. While it may be true, adding an extra bathroom is not an investment that you are certain to recoup. Whether your new bathroom is midrange or upscale, you are only likely to get back about 56 percent of what you invested.
It is a well-known fact throughout the real estate industry that swimming pools are poor investments. The reality is that they are often more of a hassle than they are worth to homeowners. They are expensive with initial costs that can range from $30,000 to over $100,000. They are also costly to maintain and can present an enormous legal liability. It is highly unlikely that you will recoup the investment when you sell.
Too Much for the Neighborhood
Expensive remodels that place your home above neighborhood standards are unlikely to get as much in return as you would expect. For example, that second story is unlikely to make a prospective buyer willing to pay more if the home is among single-story homes. The home will seem overpriced even if it has more to offer than neighboring properties.
While backup generators can be useful during blackouts, they are expensive to install. In all likelihood, you will only recover a fraction of that investment when you sell.
Renovations that can raise the value of your home.
Steel Front Door
Installing a new steel front door can transform your home’s look and feel, which means that it has a significant impact on curb appeal. Other benefits include improvements to both the energy efficiency and security of your home. With its low initial cost, a new steel front door is arguably the one renovation that can give you the most value for your money.
These days you can get vinyl siding with finishes that resist fading and with lifetime warranties that far surpass those on older siding. Keep in mind that siding plays a significant role in curb appeal as it is one of the first things that prospective buyers see when they pull up to your home.
A homeowner receives returns on their solar panel investment with lowered electricity bills and tax credits. You can determine the kind of ROI that you will get by dividing the annual benefits by the initial cost.
New attic insulation is one of the most cost-effective investments that you can make in your home’s value. The extra insulation will also reduce the amount that you spend on energy.
As you can see, a renovation is not always the best option for improving value. Unless you need extensive work to get your home up to code, it makes sense to think carefully before investing in one.