Some home improvement projects may add to the appeal of your home for some buyers, such as an in-ground pool - but may not have as much impact to the market value. Other projects may actually have a negative impact on your home’s value. For example: Knocking down a wall and losing a valued bedroom or built-in audio/visual electronics, which may grow obsolete quickly and become an added cost to have removed.
Cost does not equate the increase in value. A $40,000 kitchen renovation does not mean your home’s value will be increased by $40,000. That is not how any of this works. You may be surprised to learn how much impact to your home’s value a renovation will actually yield. Do your research on which home upgrades will generate the highest return on your investment. To help identify your budget spending, contact a realtor or an appraiser as a first step to help you to determine the market value of your home. After knowing the market value of your home, you can then factor a percentage of the home’s value as an upper limit that you would be willing to spend on a specific home improvement project or upgrade.
DIY or hire a contractor? Buyers can spot shoddy work at first glance, which can cast doubts on the integrity of the work throughout the property. Before saving yourself some money by searching YouTube, consider your level of resources, skill and ability to complete the project(s). Even with the proper construction permits, work which was not completed by a professional can have a negative impact on both the appeal and value of your home. It may be possible to do a portion of the work yourself while hiring out other parts.
What types of improvements should you make to your home first? Before focusing on the more exciting cosmetic upgrades, it is wise to first confirm, that the structural and mechanical components of your home are functioning properly. You should be sure they are not in need of repair or replacement, especially if you plan to sell your home in the future. Buyers know what the expected, usable life is of: Heating & plumbing, electrical systems, roof shingles and leech fields; and they know that they will have to deal with these issues. This can impact both the value and the appeal of your home. Improvements which require maintenance, such as central air conditioning or irrigation systems, may require more upkeep than buyers wish to take on.
The National Association of Realtor’s 2015 first ever “Remodeling Impact Report” ranked these improvements as projects likely to add value for resale (highest to lowest):
New Vinyl Windows
New Garage Door
New Vinyl Siding
New Wood Windows
New Fiber Cement Siding
New Steel Front Door
New Fiberglass Front Door
Complete Kitchen Renovation
Add New Bathroom
New Master Suite
New Hardwood Flooring
Basement Conversion to Living Area
Attic Conversion to Living Area
Finishing a basement is a great way to increase your living space - but do not make the rooms over personalized in function if you want it to appeal to the masses on the resale. Valuation on finished basements varies, based on quality of finish, grade, natural light, ceiling height and more. Finished basement square footage brings less value than above-grade, finished square footage. A garage can be expensive to construct - but here in Maine, it can be very desirable. If adding a two car garage with a single door, confirm that there will be enough space for the number of cars it’s designed for, to be parked and entered at the same time - so you do not risk having an appraiser identify it as being only a one car garage when it’s time to sell. Expanding your outdoor living and enjoyment by adding a deck to your yard or a patio? Those precious ninety days of the year could be spent scraping and staining your deck – potential buyers may view it that way. So, you may want to consider stepping up to the plate and use composite, maintenance free decking.
Seeking out the advice of trusted professional is always a great first step when it comes to your largest asset. So take your time and do your homework, to maximize your return and limit costly surprises.
Nicole has been a real estate broker at Regency Realty in South Portland for the past 11 years; specializing in single family, residential and new construction. She lives in Windham with her husband and four children. Follow Nicole at www.facebook.com/sellingmaine/ or nicolefoster.mainelistings.com