Remodeling? Read This First!

Sometimes the money we spend on our homes after we purchase them is a little out of hand. It seems that many people have even spent borrowed money to fund home improvements.

Do you know how much value these updates to your home add to the overall value of your home when you’re ready to sell? It may not be quite what you think.

I know that there are all sorts of issues and questions around the housing and real estate market. Now is a great time to start getting your questions answered, not the week before you’re ready to buy or sell. Call or email me today so we can start discussing your plans well in advance of your sale.

If you’re just now thinking about remodeling or renovating, consider that in order to get the full value of a home improvement project, you should really give yourself a chance to live with the changes.

I think it’s a mistake to take on a major home remodeling project if you have the expectation that you’ll get a 100 percent return on your investment. The ROI on new kitchens and bathrooms is pretty high, but somewhere in the 60% to 70% range is probably the most you should expect, and that varies depending on where you live,  so plan carefully.

If you have a 30 year old kitchen, you will certainly want to update it before trying to sell your house… or risk taking a beating on the price and longer market time… so don’t get me wrong, updates can be good. Updates and remodeling projects simply need to be well-planned and well-timed, and I think you should make the changes a couple of years before you actually decide to move, that way, you will enjoy the benefit of the updates, and get some experiential payback as well as a financial payback when you sell. It’s that combination of the two benefits that makes is all the more worthwhile.

Did you know that to total dollars spent in home remodeling, landscaping and major repair projects in American may exceed $400 billion dollars this year? Not all of that is done with good forethought, and sound strategy.

Never mind that some of this work is supercilious at best, with all the home improvement shows, and specialized businesses driving you to spend every last dime you have creating a home with a master bath and closet that might rival one from “Cribs” or “lifestyles of the Rich and Famous”, it’s a wonder some homeowners don’t live in a constant state of remodel-itis, breathing dust and fumes.

Here’s some tips I’ve gleaned from various resources, including my own experience and opinion:

Find a balance between wants and needs.

You can create a very contemporary update to a kitchen without putting in the most expensive options. Even though it’s tempting to put in slab granite or quartz counters, commercial grade appliances, and custom cabinets, sometimes it can make more sense to find a compromise so that your expectations fit your budget, and your home.

Find savings in some obvious places.

Instead of buying the cheapest faucets and hardware, instead maybe you should go ahead and invest in a slightly higher grade product and save costs on labor but completing some of the install work yourself. It’s absolutely worthwhile to have a professional tackle the most difficult or dangerous work, but there are likely many things you can do yourself if you have at least some basic knowledge about using a screwdriver and wrench.

Forget about keeping up with the Jones.

If you plan on selling today, and your home is hopelessly outdated, you don’t need to compete directly with your neighbors Mr. and Mrs. Jones. I’ve already suggested that you should get the benefit of living with some of your upgrades before you sell. Now, if every home for sale in the neighborhood is just like yours, and everyone has tile floors and slab counters but you… it might be a good idea to invest in renovations to match the competition in the marketplace. Otherwise you’ll likely end up being the last house to sell. If you’re simply ready for something new, consider keeping your expenses to a minimum and keep the updating current, but not necessarily on the bleeding edge of style so that you get the most bang for your buck.

No long term loans.

Don’t refinance your first mortgage or take out a home equity loan to fund the renovations. Pay cash or only borrow short-term money for home improvements. You’re already losing money as you go into a project, don’t create a situation that costs you dearly; an $80,000 kitchen update could turn into a cost upwards of $160,000 or more if you use long-term financing.

Thinking about renovations to prepare for selling your home in the next couple of years or so? Call or email me, and let’s discuss what your thoughts are about remodeling in preparation for the sale. I’d consider it a privilege to help you get some straight answers about this, and you’re smart to look into it long before you actually plan to market your home for sale. Let’s Talk!

-Zachary Epps, full-time professional Realtor® and EcoBroker®

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