A great renovation redefines your life and your home. Whether it’s stylish new bath tile, a cozy gas fireplace or a brick patio under the shade of your tall backyard trees, updates can spark joy for you and make your home more attention-grabbing when it’s time to sell.
So if you’re thinking of selling, you may be wondering: If you don’t renovate, will you leave money on the table? Or are you better off leaving the work to the next owner?
Renovating can feel like taking a gamble, and there are plenty of factors that can push and pull at your outcome. Read these tips and insights to guide your decision.
Hold off on the big stuff:
According to one analysis, big projects (like a luxury kitchen remodel) have less ROI than smaller ones (replacing the garage door). Remodeling Magazine’s Cost vs Value Report 2020 shows that major projects recoup about half their costs, while the smaller renovations tend to earn back a higher percentage. To learn which renovations get the highest ROI in the Minneapolis area, this report breaks it all down.
Consider the potential value of your home:
Another thing that makes recouping prices more difficult is peak market. Compare the appraised value of your home to others in your neighborhood. If yours sits on the lower end of the scale, then installing that luxury kitchen has a better chance of pay off, as long as you can control costs. However, if your home’s value is already close to top value in your neighborhood, then you run the risk of over-renovating. Before you settle on that project, get your house appraised, seek multiple bids and weigh the costs to decide if it’s worth it.
Search for DIY options:
In general, the more contractors and materials are required for the job, the more it will cost you. To improve ROI, make a detailed list of tasks and projects that you can take on yourself. For example, maybe you feel comfortable retiling the floors, painting rooms and replacing the light fixtures. Leaving just the heavy, more complex jobs to the contractors can reduce your costs, making it easier to recoup them in the sale.
Consider your timeline:
Once the big project is done, sometimes it pays to hold off on selling for three to five years. That’s because gains in the market could very well push the project into the profitable zone. Keep in mind, no one can predict what will happen to housing prices in the short term, so make sure your finances can handle it if you end up having to sell at a loss, or hold off until the market rebounds.
Need to sell fast but need updates? Read Selling in a hurry? 5 essential steps to get the best price.
Gauge your local market:
Before you start ripping down your walls, talk to one or two licensed Realtors. They know what local homeowners are looking for and can help you make informed decisions about your house. Whether you’re thinking of building a deck or turning the unused attic space into a loft bedroom, their insights can help guide your decisions.
Looking for advice or trusted professionals to help you get your house ready for market? Reach out to Scott Haubrich at BuyRentSell.com today by calling 612-298-5400.