CHAPTER 8 Upgrade with ROI in Mind OI in Mind
Making upgrades to your home can be as easy as replacing the handle on your front door or as daunting as remodeling a kitchen or bathroom. There are some things you must keep in mind with regard to market value and return on investment when updating your home to sell. What home improvements give you the best return on your remodeling dollar? The return on investment is generally less than 100% in real estate, so the rule of thumb is “less is more.” Accordinging to HGTV, doing minor upgrades to the bathroom, such as recaulking, replacing old/outdated fixtures, changing the shower door, and giving the room a fresh coat of paint can yield a 102% return on investment. If your home is worth $275,000 and you spend $15,000 to revamp the kitchen, don’t make the mistake of assuming that 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%. Smaller upgrades like replacing outdated fixtures in the kitchen and bath are certainly worthwhile, but major remodeling of those rooms is not wise. That’s not to say you can ignore necessary repairs that a home inspector would red-flag or a mortgage company would demand before issuing a loan to a buyer. If you are facing major problems, like a leaking roof or outdated electrical wiring, you must either address those repairs yourself or be prepared to make major concessions on pricing to the buyer, so that they will not have to bear the burden of major repairs as well as the price of the home.
STARTING WITH THE B G WITH THE BASICS
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