Remodel or Upgrade? – richmondmagazine.com

When done well, remodeling projects can improve the quality of life you enjoy while living in your home and increase its value when it’s time to sell. But all renovations are not alike: Timing, budget and location all play a role in the return on investment (ROI) they bring. 

According to the National Association of Realtors, Remodeling Magazine and local selling agents, timing is everything when it comes to renovating your home. If you’re planning to live in it for years to come, adding on to the house to increase your usable square footage — a primary bedroom suite, a state-of-the-art kitchen, new bathrooms or a family room — is an investment that brings a higher return as your house appreciates over time. But you should think twice about a major construction project if you’re planning to sell right now.

“If you plan to sell right now, you don’t want to eat up all your equity in sprucing up the house to sell it,” says Veronica Taylor, a Realtor with Keller Williams West. “If the main goal is to just get a good price on the house, a lot of times there are minimal things that you can do to bring your house up to a marketable value. It could be something as simple as replacing your windows.”  

Key Investment

Protecting mechanical systems and the building envelope — the roof, windows, insulation and siding — with regular maintenance, upgrades and repairs is one of the best investments you can make in your home. A 2021 study on the cost of home remodeling projects versus investment in the Richmond region by the housing market-research firm Zonda Media reports that depending upon the type (wood or vinyl), window replacements recoup 57.1% to 62.9% of your investment at resale; siding replacement (again depending upon the type) 76.2% to 78.9%; and roofing replacement, whether asphalt or metal, 52.5% to 65.1%.

“It’s fine to you because you’ve lived there for so long. But for the next person coming in, they want move-in ready.” —Veronica Taylor, Realtor with Keller Williams West

“Bear in mind that they aren’t really improvements,” says David Feibish, an associate broker with Joyner Fine Properties. “People expect a roof in good condition. They expect the furnace and air conditioner to work. They’re not going to pay you more because you put in a new system. They expect it to be working fine. You can’t say, ‘I just put a $5,000 system in, so my house should be worth $5,000 more.’ It just doesn’t work that way.”

Put Your Best Foot Forward

They say you have one chance to make a first impression, and that applies to houses, too, whether they’re viewed in person or online. Investing in curb appeal pays dividends: “Curb appeal helps get people into your house,” Taylor says. “It’s the first thing you see when you pull up. You’ve got to get them in there to sell it to them.”  

Simple upgrades that improve curb appeal and earn high returns include entry door replacements (74.2%) and garage door replacements (90%), according to Zonda Media. 

“Your house is beautiful [to you]. It’s fine to you because you’ve lived there for so long. But for the next person coming in, they want move-in ready,” Taylor says. “You do the kitchen and bathroom. You change your carpet — sometimes you might just clean it — but if it’s been down for years, you need to change the carpet.”

For homeowners getting ready to sell now, she advises keeping to a minimal budget and sprucing up with simple upgrades that have big impact: a thorough cleaning and decluttering; fresh paint; new countertops, cabinet hardware and fixtures. They’re not free, but they’ll help your property present and sell better.

Kitchens and Baths: High ROI

Pay close attention to your kitchen and bathrooms — they’re the most used rooms in the house, and because of that, they are of prime importance to homebuyers. According to Feibish, you’ll always recoup something on your investment in those spaces. Zonda Media reports that major kitchen remodels, both midrange and upscale, have an ROI just under 48%, while minor, midrange remodels generate a return of 76%. Bathroom remodels recoup anywhere from 47.3% for a luxury renovation to 61.5% for universal design, allowing homeowners to age in place. However, if your home is in an upscale neighborhood, and you’ve lived there for a long time, renovating your kitchen and/or baths to bring them up to par with the neighborhood standard will pay off at the time of sale.

Your kitchen and baths should be neighborhood-appropriate. You can upgrade without overpricing your home by thinking strategically about your budget. It’s important to keep in mind that improvements that are purely decorative or outside the norm for the homes in your area will always have a worse return than midrange upgrades. As Taylor cautions, you don’t want to have the most expensive home in the neighborhood, but you don’t want it to be the cheapest, either.