CHAPTER 5 Upgrading with ROI in Mind OI in Mind
The National Association of Exclusive Buyer Agents (NAEBA) recently conducted a study among their online members to discover what they found annoying or undesirable when searching for a new home. Some of the answers will surprise—or disgust—you: Making small improvements can gain you thousands of dollars in your home sale. A broken-off doorknob can cost a sale and a new door can make one. Maritz Research Staging Polls found that 63 percent of buyers preferred a higher-priced home that does not require any renovations to a lower-priced fixer-upper. Making upgrades can be as easy as replacing the handle on your front door (which you’ll want to do) or as daunting as remodeling a kitchen (which you likely won’t want to do). There are some things you must keep in mind about market value and ROI when updating your home to sell. For starters, what home improvements give you the best ROI on your remodeling dollar? ROI on real estate improvement investment is generally less than 100 percent, so the rule is “less is more.” In 2016, a remodeling publication said the best ROI improvement a home seller can make is insulating the attic space, exceeding 100 percent and reaching a 116 percent return. However, if your home is worth $275,000 and you spend $15,000 to revamp the kitchen, don’t assume the investment will increase the value dollar for dollar. The remodel may add value to the home, but the return in dollars spent will be around 50 percent. Smaller upgrades, like replacing outdated fixtures in the kitchen 42
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