Do you need to renovate your home before putting it on the market? Renovations can cost a LOT of money and be very time-consuming, so you want to be careful as you determine whether that money will be well spent and help sell the house at a high enough price to justify the time and effort.
Let’s discuss whether renovating before selling is a great idea and what kind of return on investment one can expect from home improvements.
What is ROI in Home Improvements?
ROI stands for return on investment. It is a way of measuring money and getting it back by what one has invested in, like house renovation. The ROI is the amount you can expect from money spent on fixing up a home upon selling the house.
For example, if you spend $10,000 remodeling your kitchen, bringing in $12,000 more in value for your house, your return is 20% ($10,000 was your initial investment, $2,000 is the “return” you made on that investment, and you must divide the return by the initial investment amount to determine your ROI). Some renovations yield a better ROI than others, so choose wisely if you want to make some improvements.
Benefits of Home Renovations Before Selling
Depending on the circumstances, remodeling before selling might have several advantages. First, it will make your house more buyer-friendly. A newly renovated kitchen, up-to-date bathroom, or even new flooring can make a significant difference in the appeal of your home. Most buyers are ready to pay a premium for a home with little work involved.
Second, renovations may help your house sell faster. If it is spruced up and ready to be lived in, it will attract more buyers, which means it will sell faster than a house that needs a lot of repairs.
Cons of Renovating Before Selling
While renovation will increase your house’s appeal to buyers, it has a few drawbacks. Renovations are costly, and there is no guarantee that you will recover the total amount you put into house sales. Some upgrades cost more than they add value to your house, so you might spend more than what you will make back.
Another disadvantage is that renovation projects are time- and labor-intensive. They may take weeks or months to complete, delaying the sale of your home.
Which Renovations Offer the Best ROI?
If you decide to renovate before selling, it’s best to focus on improvements that offer the best ROI. Some of these most cost-effective renovations include:
- Kitchen Upgrades: Modern and updated kitchens are among the top items on most purchasers’ lists, which can be a significant selling feature. Simple updating, such as new countertops, cabinets, or appliances, often provides a good ROI.
- Bathroom remodels: This is another section where buyers tend to like updates. Whether installing new fixtures, replacing a vanity, or adding new tile, whatever will give your bathroom a fresh look will interest a buyer.
- Fresh Paint: Painting has to be one of the cheapest yet most effective means to make your home look impressive. Nothing works like a coat of neutral paint all over to appeal to more buyers.
- Curb Appeal: First impressions do matter, so provide some curb appeal to the outside of your home. Modest improvements like sprucing up the landscaping, new siding, or a fresh coat of paint on your front door enhance the outside appearance.
- Upgrade to Energy-Efficient Materials: By adding energy-efficient windows, doors, or insulation, buyers who want to reduce energy costs may find your home just the same. These improvements add value to your house.
Is It Worth Renovating a Property Before Selling? It depends on your situation. A licensed realtor from Northwest Realty Group can help! If you find this blog helpful, please visit our website and check out our recently published articles to enhance your real estate experience.
