Question:
I would like to sell my home in the next 5 to 7 years as I know my current home is not my ideal for the long term, but will suit me just fine in the short term.
Since I would like to sell at some point, does it make sense to do any home improvements? The only significant improvements that I believe would be attractive to a potential buyer are updating the kitchen (current kitchen is useable but would look tired to a potential buyer), installing energy efficient double pane windows and adding air conditioning. I would really like to avoid doing any of these because they would just add more debt to my loan balance and cut into my proceeds at the time of sale. However, I also want to make my house attractive when it comes time to sell.
I know these improvements have the potential to add value, but it is my understanding that I would not get that great a return on my investment. It seems like it would be a waste to do a kitchen remodel when a prospective buyer might not even like the updates that are done.
-Casey
Answer:
You raise a very common, yet important question.
It is my experience that buyers have a few “hot buttons” when they are forming a first impression of a property.
The first one is curb appeal. Curb appeal is a powerful selling tool, and you don’t need to create the Versailles Gardens. Simply mow the lawn, plant some pretty flowers, replace the mailbox, and perhaps paint the front door. If you spend about $1,000 on this, you will get this money back for sure.
I believe you should focus on smaller, more visible upgrades inside your kitchen (second hot button), such as installing new granite countertops and stainless steel appliances. Keep your costs down and use a few high-end materials to make your kitchen look fresh.
To answer your “recoup” question: While the amount you recoup may not be as high as it once was, projects like these will help you sell your home faster and for a better price than a home that isn’t renovated.
According to cost vs. value report that I recently read:
| Home Renovation Costs & How Much You’ll Recoup | ||
| Project | Average Cost | Average Amount You’ll Recoup |
| Replacing the roof | $18,042 | 67% |
| Replacing the siding | $9,910 | 83% |
| Turning the attic into a bedroom | $46,691 | 77% |
| Extra closet space | $1,250 | 50% |
| Remodeling the bathroom* | $15,789 | 78% |
| Minor kitchen upgrades | $21,185 | 83% |
| Installing an energy-efficient window | $325 | 50% |
| Minor landscaping | up to $1,000 | 100% |
I am printing and laminating this post!
I've got a great Realtor I am doing work for, the poor guy has a listing that is 100K overpriced (in my humble opinion, but what do I know, I've only been in this business 17 / 18 years LOL) – the seller wont budge because he says he spent 100K on the pool. THE POOL!!!
I hope that made you laugh, it sure did me.