When Sellers are preparing to list their homes, what updates to the homes will get the biggest return? In addition, which projects or improvements should, typically, be avoided?
According to the January, 2010 Realtor magazine, most projects that increase livable space both in and around the home are the things that will attract buyers. Generally speaking, the trend seems to be that people want to get more house for their money. In past years, converting attic space to living space was a project that landed in the middle of return rankings. This year, this project ranked much higher (nationally). Another investment that did well, and cost much less than converting attic space, was adding a wood deck (thereby expanding the exterior livable space).
Overall, the improvement project with the highest return on investment was replacing the entry door with a new door in a mid-range price point. Of the items surveyed, this one was the least expensive, but provided the greatest percentage of return across the board. This trend shows us that first impressions are very important.
For the “mountain region” (including Arizona, Colorado, Idaho, Montana, New Mexico, Nevada, Utah and Wyoming), the next highest percentage of return came from siding projects. Replacing siding with a fiber-cement material (such as Hardiplank) produced a return of 83.6%, and replacing with a foam-backed vinyl siding produced a return of 81.4%. After these came window replacement, showing a mid-range quality wood window bringing 79.7%, a mid-range vinyl window bringing 78.2%, an upscale wood window bringing 76.1% and an upscale vinyl window bringing 79.5% return. Also to note in this section, a mid-range basement remodel provided a 76.9% return.
Also interesting to note from this survey is that many of the upscale remodels (to include a bathroom, composite deck, garage and master suite) provided much less of a return than the mid-range remodels of the same areas. To me, this shows that Buyers are either unwilling or unable to pay a premium for higher end products.
The same article lists ten projects with a relatively low cost that will bring a nice return:
(1) Tidy up kitchen cabinets (and potentially add roll-out organizing trays);
(2) Add or replace tile (can make a room look much cleaner);
(3) Add a breakfast bar (especially when a wall separates a kitchen from a family room);
(4) Install granite tile instead of a more costly granite slab to upgrade countertops;
(5) Freshen up a bathroom without re-tiling (new medicine cabinet, light fixtures, faucet, vanity, existing tile grout scraped and re-grouted, glass shower doors, a French door);
(6) Freshen up the unfinished basement (have contractor fill in cracks in concrete walls and paint with waterproofing paint, paint floors with a good floor paint);
(7) Add a room (look for large spaces that can be enclosed to create a room for the cost of creating a wall);
(8) Spruce up cabinet fronts (reconditioning and replacing hardware or re-facing the cabinetry);
(9) Replace light fixtures (in a foyer and bathrooms/kitchens – replace track lighting with recessed canned lights on a dimmer and add pendant lights over a kitchen island);
(10) Tech-up the garage (replace the garage door opener with a touch pad entry system).
*This information was gathered from the January 2010 edition of the Realtor magazine.