Billions are spent in the U.S. each year on home upgrades and renovations. Sometimes, these are due to personal interests or needs, in which case, no price tag may be too high as long as the job is done right. However, a lot of people employ a more strategic mindset when it comes to home renovations. Their goal is to try and fix/modify certain areas of a house prior to selling it to reap a higher return on their investment.
While many homeowners do this to great effect, sometimes, the work doesn’t pay off. Whether things succeed or fail is largely a matter of understanding ROI (return on investment). Here’s what you need to take into consideration when you decide on your next home renovations.
ROI is essentially how much you make back in comparison to what you put in. If you paid $10,000 in landscaping, but the buyer was only willing to pay $7000 more for the home as a result, you’ve essentially lost money on the venture. This is the last thing a home seller wants to see, considering that they likely have to still buy a new place to live after they sell. So, what do you need to know to avoid this nightmare scenario?
The fact of the matter is, not all parts of the home are created equal. Rooms like the kitchens and bathrooms are some of the largest factors when it comes to increased housing prices. The reason for this is that, by and large, these are the most expensive and time-consuming to renovate. Kitchens require a lot of high-end appliances, while bathrooms require plumbing services. New home buyers may not want to take that burden on, but these are also high-traffic areas, so they can’t be ignored. As a result, if you have the funds and those rooms are looking a little worse for wear, these are good places to start.
With this said, a new kitchen isn’t going to save you from something like water in the basement. If your home has major issues, it’s always best that you focus on those first. After all, if someone was to buy your property, that would have to be the first thing they attended to. The money they need to pay will be reflected in a lower offer for you. Another thing to note is that just because you have a lower budget doesn’t mean you can’t make smart renovations. In terms of ROI percentage, cheaper measures like a new paint job, fixed siding, or a new door can actually give you the most bang for your buck.
Making strategic renovations is something that every home seller should be thinking about in order to increase the home’s value. However, strategic means finding things that will result in an increase without breaking the bank first. This can change based on yearly trends or even the neighborhood that you’re in, so you want to run any ideas you have by a skilled real estate agent in the DMV metropolitan area first. They can help you determine exactly what you need so you can get the most for your renovation budget.