The right home renovations can add money on resale. But home renovations can be expensive. How can you know which renewals will pay that money back when you sell? Seasoned real estate agents and contractors know the answer to this question, so I asked them this question.
“Cost overruns are common,” said one contractor. “No matter how well we budget, we always find something that complicates the job, or the owner changes his mind about something. It’s like building a custom house, there are surprises.”
“So what you’re saying is that a homeowner who wants to renovate needs to plan carefully?” I asked.
“Exactly. Do your research before you dive in. We see a lot of people dive in very excited about, say, knocking down a wall to open things up and then finding out that the replacement structure is very expensive.”
One real estate agent told me, “Homeowners should reconsider a new wallpaper project. Wallpaper looks great for about three months and then it’s outdated. I hear prospective buyers say, ‘Uh, we’ll have to tear off that wallpaper’ almost every time you see flower wallpaper on a tour. It’s negative.”
Another element is when a homeowner knocks down a wall to enlarge a master bedroom by removing the adjoining bedroom. “Sure, the master is glorious and wonderful, but now, at the resale, you have a two-bedroom house instead of a three-bedroom house. Believe me, this will reduce the value of the house, even if it has three bathrooms,” he said. the real estate broker.
Said another contractor, “Converting a two-car garage into a family room is a renovation project we get that will cost more than you think, and reselling doesn’t add much. If the new room is in a garage without any windows, the Most code inspectors won’t let you use it as a bedroom either. And people like garages.”
The one mistake I saw a lot of when I was a home inspector was homeowners deciding to do the renovation work themselves. I’m not saying qualified people shouldn’t step in and do some or all of the work, but make sure you’re really qualified. Sometimes people don’t know what they don’t know. DIY renovations can be pretty obvious and unappealing to homebuyers.
An example was a bathroom in a house where the owner had installed all the fixtures himself. Incorrect plumbing traps, fixtures and couplings used, hot water line going to toilet (didn’t notice) and three faucets were slow leaking. The buyers liked the house, but turned down a $1500 estimate to fix everything up to code in that “unique” bathroom.
“I’ve seen people spend a lot of money on a very fancy and luxurious kitchen. While they liked it a lot themselves, when they went to sell they only got about 20% of that cost back. The reason was that the house was just not in that price point or in an area with other homes that would get that kind of upgrade. So tell your readers to do some serious research before they decide to spend a lot of money on the kitchen, unless they’re staying in the house.”
The lesson here is this: research and planning are critical if you want to renew. Find out what the return on investment is (the Internet, contractors, and real estate agents can help) before you start, and get at least three proposals before you start.