If you are thinking of making changes to your existing home, but don’t plan on living there forever, you should consider how your home improvement projects will impact the future resale value of your home.
According to Remodeling magazine’s 2014 Cost Vs.Value Report, in Iowa, our returns for remodeling investment are far below national averages. The best return, at 75%, is for an attic bedroom remodel. For a major kitchen remodel, you can expect to add to the sale price of your home just 62.5% of the project’s price. Replacing vinyl siding on your home will return 66%.
If you only have one bathroom, install a second bathroom before remodeling the first. Although it is true that kitchens and baths sell homes, you have to be aware that trends in kitchens and baths change over time. It’s hard to believe that these avocado appliances were once the height of fashion. What will buyers think of walk-in showers and subway tile in a few years?
Make sure to understand your market, and don’t over-improve your home. The prices that your neighbor’s homes command determine, at least in part, the price that your house can command in the marketplace. A master suite addition with a steam shower may be your dream, but if it’s the only one in the neighborhood, you won’t see a strong return for your home improvement dollar. If your tastes and budget have grown beyond the norms in your neighborhood, the smarter financial decision might be to trade up to a home that already has the features you desire.
If you’re planning to live in your house for a long time, feel free to spend the money to make it yours. You may not recoup the cost of your improvements when you eventually sell your home, but you will have enjoyed the improvements for years.
If you are planning to sell your home in the very near future, you are probably better off letting the next homeowner make the improvements and focus instead on staging.
If a home sale is likely on the horizon, but a few years in the future, you need to be most concerned with basic maintenance: roof, windows, HVAC, etc. Another good bet is landscaping, which will boost curb appeal for years to come. If your home is completely updated, your home will appeal to more home buyers, and you will likely sell your home more quickly. A home with “great bones” that needs a new kitchen, new baths and new carpet will very likely sit on the market longer than a ready-to-move-in showplace. Therefore, if it will be very important to you to sell your home quickly in the future in order to avoid the costs of maintaining two homes, then remodeling may pay off in the end.
For expert advice on maximizing your home investment, or to learn the current value of your home in today’s market, call your real estate professional. We are always happy to discuss your real estate goals, even if you don’t plan to sell your home for years to come.