Does the new year have you eyeballing some new home improvement projects?
Whether you’re itching to add a bathroom, rip out your kitchen and start anew, or just replace a few windows, it makes sense to know what projects promise the highest rate of return come selling time.
Clients are always asking where they should allocate their renovation dollars. I encourage them—if budget allows—to renovate a few years before they plan to sell so they can enjoy their efforts. There’s nothing more frustrating than finishing a bathroom remodel and then realizing you could have done it three years before, and enjoyed it, before you moved.
In a market like this, it pays to renovate in order to make your property stand out. Clients sometimes wonder whether it’s necessary to actually do a project–couldn’t they just price their property to reflect the money for a buyer to do the project themselves, in the style they desire?
Fairfield County Buyers Expect Turn-key
But Fairfield County buyers expect turn-key when they buy. And, frankly, they have plenty of options. To maximize your settlement statement at close, it’s ideal to update before that ‘For Sale’ sign goes in the ground.
Remodeling Magazine has just released its annual Remodeling 2018 Cost vs. Value Report, which analyzes what you’ll pay for upgrades and how much you’ll recoup on that investment. Researchers analyzed popular home improvements in housing markets nationwide, polling contractors on how much they charge for these jobs as well as real estate agents on how much they think these features boost a home’s market price. Each project’s upfront cost was divided by the home’s resale value; the resulting percentage is the cost recouped from the investment.
Here are projects with the greatest rate of return (figures are for the Bridgeport, Connecticut, area):
1. Garage door replacement, 133% cost recouped
2. Bathroom addition (midrange), 94% cost recouped
3. Minor kitchen remodel, 92% cost recouped
4. Deck addition (wood), 83% cost recouped
5. Manufactured stone veneer, 84% cost recouped
6. Universal design bathroom, 83% cost recouped
7. Grand entrance (fiberglass), 80% cost recouped
8. Siding replacement, 76% cost recouped
9. Entry door replacement (steel), 75% cost recouped
10. Roofing replacement, 73% cost recouped
And, finally, next are vinyl or wood window replacements, just above 70%.
Surprised by these results? I’m not.
First impressions and kitchens and baths consistently sell homes. A new door, garage door, exterior painting or a new roof project the image of a well-maintained home.
What home renovation projects score the lowest? Backyard patios, an upscale bathroom addition and a master suite addition. Somewhere in the middle, with cost recoup values in the 60-70% range, are bathroom remodels, major kitchen remodels and a composite deck addition.
Though buyers need to come to terms with the fact that most renovations won’t pay them back in full, the current market may require those very remodels in order to entice a buyer to pull the trigger and purchase.
Lisa Bender is a realtor with the Wilton office of William Raveis and a regular contributor to GOOD Morning Wilton. She writes about the Wilton real estate market. She can be reached at 203.246.6986 or via email.