It is a question many homeowners wrestle with: is it worth making costly home renovations before putting your home up for sale? Real estate experts say renovations can help attract more potential buyers but there are not many renovations where homeowners can actually recoup all of the costs.
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1. Practical Pays Off
While it may be tempting to spend thousands of dollars to add a fancy new kitchen or upgrade a bathroom, real estate experts say you will probably not get all of the renovation costs back when it comes to sell. “You may get joy from it and it could attract buyers online. But if you are actually talking about dollar value recouped, things like a new roof or refinishing hardwood floors those things bring in the value,” says Jessica Lautz, analyst at the National Association of Realtors.
Lautz says practical renovations that can fix a problem or bring down energy costs are probably a better investment. In a recent survey, NAR found homeowners are likely to recoup ALL of their costs from adding a new roof and refinishing hardwood floors when it comes time to sell. Most of the costs for adding insulation, new wood floors and new garage doors are also likely to be recouped. In comparison, it is estimated homeowners will recover 67 percent of the value of a kitchen upgrade and 58 percent of the cost to renovate a bathroom.
2. Keep It Simple
No matter what the renovation, Kerrie Kelly, a design expert at Zillow (NASDAQ:Z), says keeping it simple is the best strategy. “We are seeing a real timeless, classic aesthetic and something simple that can create a backdrop for any aesthetic has been very popular,” Kelly says.
Subway tiles, Shaker cabinets, farmhouse sinks and quartz countertops are among the most in-demand renovation features. These features, she says, offer buyers durability and can appeal to a variety of tastes. Zillow found that real estate listings with these features sold faster and sold for up to nine percent more than expected.
When it comes to carpet versus hardwood, Zillow found hardwood is probably the better bet. It found listings that mentioned “new carpets” had no impact on the sale price. Homes with “hardwood floors,” however, sold for more than two percent above what was expected.
3. What to Avoid
Certain home upgrades may not have a big payoff at all and real estate experts say it may not be worth the cost or effort to upgrade. One example, hot tubs and jacuzzi tubs did little to lift a home’s sale price according to Zillow. Expensive upgrades including marble and stone tile also showed little impact on sale prices.
Lautz says fancy upgrades are great for homeowners to enjoy and may help attract some buyers but it is no guarantee they will boost the sale price a whole lot. She says practical improvements, while not very exciting, will probably have a bigger payoff when it comes time to sell.