Invest in Maintenance and the Right Renovations for Resale
Spending money to maintain your home isn’t as much fun as renovating it. No one gets all that excited about getting a new roof, while adding a sunroom on the back of your home can make you fall in love with your house all over again.
But maintaining your home is critical to keeping its value. And knowing which renovations add to the value of your home and will help you for future resale is important before you undertake that expense.
Chris Farrell, the Economics Editor for Marketplace Money, recommends spending 1.5 to 4 percent of your home’s original cost on maintaining the value of your home. He adds that maintenance could consist of tasks as simple as repainting and tending to the yard work.
While it is becoming a seller’s market, more sellers who have been waiting to put their homes on the market will be doing so. Having your home in excellent shape will help you stand out when you do decide to put your home on the market.
View this Home Maintenance Quiz provided by the National Association of Home Builders for tips and reminders on what you should be doing to maintain the value of your home.
Buyers often shy away from homes with maintenance needs that can be easily tended to for a cost that may be worth the return. Based on a survey by a leading Realtor company, nearly nine in 10 first-time buyers are seeking a move-in ready home.
And if you are in the majority of homeowners considering a renovation, remember that the cost of professional improvements to a home is not always recovered by an increase in your property’s value. Listing prices typically just reflect the demand from buyers for a home’s features and location.
Based on Zillow Digs Summer Home Improvement Trend and Spending Survey, 60 percent of homeowners are planning to make a home improvement this summer. According to the respondents, 40 percent plan to renovate outdoor spaces and 17 percent plan to renovate bathrooms. Both of these are good areas to invest for resale, with bathroom renovations having a 75 percent rate of return and outdoor area projects an 83 percent of return, according to an infographic from eLocal.
Kitchens have the highest rate: minor kitchen remodels have an 86 percent rate of return and major kitchen remodels have an 83 percent rate of return.
If resale value is important to you, be sure to choose renovations that are likely to appeal to the most buyers. You may also want to make sure that the majority of improvements are limited to what is visible during a quick walk-through if your main focus is resale. And if you do need to shell out big bucks to replace that roof, its replacement does have a 74 percent rate or return. So maybe you can get excited about that.