Many people decide to remodel their home right before they put it out on the market thinking that this will increase the value and the price they can get for the house. While this may be true in many cases, there have been cases where home sellers have spent thousands of dollars on remodeling a basement only to find out that the value of their house only increased by a fraction.
When you are selling a home, the first thing to do is talk to your realtor about what renovations would help. Because the realtor knows the area around your house and is aware of the market standards, they can give you good advice about what changes could help increase the value of your home or which would add no value at all.
How Does Remodeling My Kitchen Contribute to ROI?
One of the most important rooms in your house that could potentially yield good ROI is the kitchen. Kitchens have been known for making and breaking a good deal so you can understand how important it is to make sure it is clean, attractive and something a buyer would happily imagine themselves working in.
Under ideal conditions, a remodeled kitchen should yield up to 70 per cent ROI when you sell the house. But this is not necessary. Sometimes, people go overboard to renovate a kitchen and end up spending thousands of dollars on installing state-of-the-art equipment, countertops, islands and floors. When the time comes to put a price on the house, they realize they are not getting even half of that money back.
Remodeling a kitchen specifically for the purpose of ROI requires careful observation, market comparisons, planning and calculation. Take granite countertops, for instance. Let’s say my house is valued at $300,000. I spend $5000 on getting granite countertops installed in the whole kitchen. However, other homes in my area had laminate instead of granite and sold for a lower price than I am pricing my home for. Potential buyers will never be ready to pay extra for granite countertops especially when they can get a similar home for a lesser price. After all, they can always get granite countertops later if they want to, right?
On the other hand, if all other homes in my area do have granite in the kitchen, it becomes a necessity for me to install the same in order to not be underpriced when selling my home. The general rule is that you should not spend more than 5-7 per cent of your home’s current value on any renovations.
While renovations for countertops, cabinets, islands and floors will eventually help you get a better return on your investment in most cases, the most important aspect of making this decision is the planning. Talk to your realtor, ask them what they think and they should be able to give you a good idea of what is and is not needed.
For any assistance about increasing ROI for your house or for the sale or buying of property, please contact us at 617-734-6900 or firstname.lastname@example.org.