First, let’s start by agreeing that the phrase “pays off” can mean different things to different people, especially when discussing the broad subject of residential real estate. Let’s also accept the premise, just for this article, that “pays off” refers to the financial or monetary version of that phrase and not to the more ambiguous personal preference version. OK, since we’re all in agreement on those cumbersome details, we shall proceed.
Money’s not Everything
One major aspect inherent to remodeling that is important to understand and remember at the outset is that in most situations, you will not recover all of the money that you’re likely to spend on a renovation project when it comes time to sell your home, even those that raise the overall value of your home.
Now that you know we’re talking about the money end of remodeling residential real estate properties and that you’re just going to have to accept the fact that you will most likely spend a lot of it throughout the remodeling process, you are mentally primed and prepared to consider the following suggestions objectively.
The Devil you Know
In order to ensure your home stands out among the other homes in its price range, you might not need to spend a lot of money or time adding or subtracting to what’s already there. The No. 1 way to realize a significant pay-off for your remodeling project is to focus on repairing any or all of the known problems with your house, such as a leaky roof or archaic plumbing. Depending on the specific repair or repairs, you could actually improve the value of your home and recover most if not all or more of the money spent on the repair(s).
In its annual Cost vs. Value Report for 2011-2012, Remodeling magazine listed attic bedroom renovation projects as the one with the best chance of paying off. The site shows that in 2012, the average project cost for homes on which these jobs were completed in the Washington, D.C., area was $44,843; and the average resale value was $36,148, giving you an 80.6 percent cost recuperation.
Kitchen remodeling projects also tend to pay off on a more regular basis than most others in residential real estate do, even though new appliances, cabinets and countertops, and flooring are unquestionably expensive. Once again, we turn to the good people at Remodeling magazine to take care of the number crunching for us. And they say that the cost recouped on major kitchen remodeling projects over the past year averaged more than 70 percent. Like in the attic bedroom project described above, they recorded the average job cost as $54,426, with an average resale value coming in at $38,709.
This is filed under Home Selling.