We are often asked if remolding a home will not only increase the value of a property but pay for itself upon resale. It is tough to say definitively, but for the most part, any renovation you embark on should hold the greatest value in your enjoyment and quality of life. Remodeling a home with the sole intention of increasing its resale value is likely to fall short of expectations.
Why? There are many factors that come into play when determining a value of a property, including what buyers might be willing to pay. The trick in real estate is to find that balance between the two.
Sometimes even cosmetic decisions can affect the resale value of your property. If you remodel your kitchen and select a countertop that you enjoy but is unique in its color and texture, the likelihood of multiple buyers enjoying the same style is small. This creates a much more narrow pool of people you can sell your home to. Selecting furnishings, appliances, colors and flooring that accent the architectural integrity of your home, as a focus, can prove to be a much safer investment if resale is your focus.
Consider your neighbors, location of your home and its current value. Some homeowners remodel their homes right out of a profit. If your home was already at the top threshold in market value, adding additional pressure to gain any remodeling costs at resale can end badly. You can over spend and over value your home.
Not all remodels provide the same bang for their buck. Kitchens and bathrooms typically steal the spotlight in a home remodel, but they aren’t necessarily the ones that have the highest return on investment when you sell your home. Smaller, less sexy renovations give you the bigger bang for your buck such as: a new front door, replacing the siding, new windows, deck addition or a minor remodel to a kitchen. One of the lowest returns on investment has shown to be a home office.
Fundamentally, your home is your castle. You have worked hard to purchase it, you take pride in maintaining it, and you have enjoyed living in it. If there are some things that you would like to do to spruce it up and make it more functional, esthetically pleasing, or bring it into the modern world, do it for your enjoyment. This way if you do recoup your initial cost of the remodel it is a win-win situation.
Still considering taking the “hammer and nail plunge”? Consider these questions posed by Realtor.com in a recent article on home remodeling. They might help you clarify your decision to remodel or give you pause and allow you to adjust the scope of the project.
- How long do you plan to live in your current home?
- Will you get to enjoy the results of your remodeling project?
- Will the remodel meet an immediate but temporary need? Or be an investment in your lifestyle?
- How old are you? What kind of income do you anticipate in the years ahead?
- If you are close to retirement, is now the time to invest in home improvements?
- How much chaos can you live with during the renovation process?
- Does your house—the floor plan, the garden, the bathrooms, everything—work for you?
- Will your home need a lot of updates? Will there be simple ways to update things like energy usage?
Once you have taken a deeper look into this journey and you are still game, call us. We are happy to come out to your property and give you an obligation-free assessment of your plans from a real estate perspective, as well as access to our vast list of experienced and trust-worthy service providers that can assist you with your improvements. A professional perspective from a realtor, home appraiser, or interior designer could save you a lot of money in the long run.
My wife and I have had many of these conversations over the years and we still chose to remodel our home, consciously disregarding any resale value it may or may not bring us in later years. We are committed to living in our home for an infinite number of years and decided what we would gain in personal enjoyment would far exceed the money spent.
We have designed and created a living space that is ideal for our lifestyle, tastes and wallet, and are immensely pleased with the results – regardless if everyone likes our choice of bathroom tile!