So you've decided to brave the dust and dirt and inconvenience - not to mention the expense - of a renovation project
If it's because you've always wanted a basement family room or extra bath and it will enhance your quality of life, go right ahead. But if you are planning to sell soon and think the renovation will increase the resale value of your home, hold on.
Studies suggest that most renovation projects do in fact increase the price of the home at resale. However, the increase is typically less than the cost of the project.
According to Hanley-Wood LLC's 2004 Cost vs. Value Report, homeowners recouped:
- 85 percent of the cost of an upscale bathroom addition when they sold their homes, and 90 percent of a more modest one.
- 80 percent of the cost of an upscale kitchen renovation, and almost 79 percent of a more modest one.
- 76 percent of the cost of a basement remodel (including large entertainment area, full bath and one additional bedroom-sized room).
- About 77 percent of an upscale master bedroom suite, and 80 of a more modest one
- 86 percent of a deck addition.
This report contradicts the common wisdom that kitchen and bathroom renovations pay for themselves, while basement renovations don't. It also suggests that you should renovate primarily for your own enjoyment and accept that your project will pay for itself only partially when you sell.
One thing the report doesn't take into account is how renovations affect the marketability of your home. Real estate agents say that a gleaming kitchen with state-of-the-art appliances, cork or hardwood flooring, stone countertop and lots of cupboard space can sell a house the instant a prospective buyer sees it. Conversely, a cramped, ill-lit kitchen with outdated linoleum and harvest gold appliances might actually scare buyers away. It screams money pit.
Bathrooms are another big draw. Both quantity and quality count. A house with two or three baths with quality fixtures and finishes will sell much faster than the same house with one bathroom with moldy grouting and ancient fixtures.
If you can't afford to renovate, update and refresh key rooms instead. Replacing an old countertop, repainting cupboards and walls and installing new door pulls and lighting can make a big improvement in your kitchen for a very modest price. Similar touches increase the appeal of older bathrooms, too.
Fresh paint throughout your home is another low-cost, high-return project - it makes everything look cleaner and brighter, and buyers love a house they won't have to redecorate immediately.
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