As many of you may know I am soon to be mom and a Realtor. Maternity leave has given me more time at home. Maybe it’s the extra hormones but I have caught the remodeling itch. With my new found time to read & research – I checked out the new stats from Remodeling Magazine. Annually they calculate the ROI for popular remodeling projects so both Realtors, Buyers & Homeowners get an idea of the trends nationally. ROI is the abbreviation for Return on Investment. This is the comparison of remodeling costs to resale value. You can check out the ROI stats for your area at Remodeling Magazine. You can search by region & major city. They have showcased the top 35 projects & you can compare stats from 2002-2011.
The information can be very useful but can lead to the good intentioned down a misguided path. Solely taking ROI into consideration can be the path to a disastrous remodel. Like all statistics the bigger picture still needs to be explained and understood.
How can ROI stats help me? To get you thinking!
It can help you get an idea of the market, help you make educated decision, to keep you realistic about what kind of return you can hope to receive. When you hear Realtors & other home professionals talk about “bathrooms & kitchens are the most bang for their buck”. They are talking about national trends & statistics like those found in Remodeling Study.
For example: Roofing
This study gives a 66.6% ROI for a new mid range roof in the Raleigh Area. It is suggested you will get 66.6% of the money you spend on a roof back. They define a mid range roof as completely removing and replacing the existing roof. It goes further to discuss the pitch of roof, style of shingle. They assume it is completed in a professional manner, with permits by a licensed contractor.
They are very specific for a reason. So we don’t get misguided & to illustrate what there expectation is. It does not mean if you replace loose shingles or changed the flashing around the chimney that you will get a 66.6% of your cash back. It does not mean you must hire a licensed contractor for every project. (Although for a roof you probably should) Most importantly it does not mean calculate 66.6% of roofer’s invoice and add it to your list price. I wish it worked that way!
Do you have enough information? Do you need more facts?
The neighborhood factors & the recently sold homes in your area are still the strongest determination of your home’s value despite how much you spend on repairs, & remodeling.
When your Realtor prices your home for sale he/she will seek comparables in your immediate area. A comparable property has sold recently, has similar features, age, size, and is physically close to your property.
Applying all the information about your area to your remodeling wish list is key to making the most out of your home & budget. Walking thru Home Depot or Lowe's Home Improvement can easily throw you off track, off budget and will feed your fantasy. It happened to me and I am a Realtor. After seeing a tile display at Home Depot I was set on having a master bath with tile shower stall – I fell in love with glass accent tiles. But the more coworkers I talked to and more homes I previewed made me come back to earth. I realized my emotions have gotten the best of me. Many of the homes that recently sold in my neighborhood had new but basic baths, new flooring, larger decks/patios & new roofs. We plan to only be in this home for the next 5 years, a fully tiled master bath although beautiful does not fit into our timeline.
By saying NO to part of a “wish list” can actually help keep focused on ways that will be more bang and less buck. To remodel just the master bath may actually make my kitchen look even more dated. Buyers visiting my home may love the remodeled bath but be disappointed by the low grade carpet & orginal kitchen. I do not want any project to be so beautiful that it makes the rest of the home look shabby, dated or poorly maintained.
Taking both the ROI stats & neighborhood information into consideration this is my new “Wish List”:
The lot sizes are larger in my neighborhood so outdoor living space is logical. A back deck that fits more than a BBQ grill will add quality to our lives now and will be attractive to buyers in the future. Keeping up the yard maintenance is important as well.
The master bathroom will still be updated but we will do more minor changes instead, like new fixtures, paint, caulk & vanity/sink instead of a major gut.
- New flooring - we currently have a mix of low grade vinyl & carpet- which chops up our open floor plan -- by changing to easy install Pergo flooring we can give our 1300 square footage more flow. Plus its low maintenance.
Are you listening? I can’t say this enough –get all the information
Your Realtor is a good source. They will help keep you on track, keep emotions in check and may be able to stop unnecessary expenses. Unlike like the Internet or DIY shows, Realtors have experience with your specific market and can apply their knowledge specifically to your needs, goals & budget.
Do you need help finding the right Realtor? I would be happy to help.