by Rachael Boyer
P.R.O.F.I.T. Series – Plan Remodel Outcomes From Investment Together
Welcome to our first ever educational series! We will be sharing insight into obtaining a positive return on investment when remodeling your home, and we have a real life example to demonstrate our points as we move through this 4-part series. We also want to focus on weaving your own tastes and style into achieving that return on investment, allowing you to both love the space and profit from it should you need to sell. Today’s segment involves looking at remodeling from a real estate perspective.
We will be moving through each segment in a Question and Answer format. First Question…
How does remodeling increase my home’s value from a real estate perspective?
The simplest way to calculate ROI in general is to divide your gain by the cost to obtain a percentage – this represents your Return on Investment. When looking at our local real estate market, agents are reporting that home buyers are looking to purchase competed homes…that is to say that the style is contemporary, cohesive, and there is not a long list of projects to take on upon buying a house. Therefore, making calculated decisions in remodeling your home can absolutely create a positive return on investment. We work with real estate agents in our area to stay up-to-date on what it is people are generally looking for in a home, giving us the knowledge to guide you through your own home’s remodel.
What are the most effective remodels for increasing my home’s value?
A poorly equipped kitchen or extremely outdated bathroom can put a bad taste in a potential home buyer’s mouth – and even with quality touches elsewhere, a poor reaction to these fundamental rooms can cause them to walk away. Making changes in both the kitchen and bath to make them aesthetically pleasing and functional will lend themselves to a positive ROI. Considering paint colors and flooring choices that are durable and neutral are also good bets in aiming for that return. Again, providing a home that does not scream “projects, projects, projects” will give the home buyer more confidence when considering purchasing a house. Tackling these renovations while you are living in the home will allow you to actually enjoy the newness prior to selling, and can create the feeling of “home” – while increasing your home’s value, and as a result, your ROI. Another benefit of completing these projects and increasing your home’s value deals with refinancing your home – and the ROI you can receive without even listing your house.
Does a structural remodel impact the value differently than a cosmetic remodel?
Structural remodels provide a greater ROI only if they are completed to correct function. For example, that wall that is boxing in the kitchen is not helping your home’s value. Creating an open concept flow that appeals to the vast majority of buyers would be a smart structural remodel choice. Other than these functional structural changes, cosmetic remodels are going to appeal most to a buyer and provide you that positive ROI. For example, adding a neutral-toned vinyl plank or hardwood for flooring will signal longevity to an appraiser and increase the value. We believe that understanding these differences – and educating ourselves in remodeling ROI details – is essential to offering the very best service we possibly can. We are not here just to add a backsplash or refinish a cabinet. We want to provide you confidence that you will love your remodeled space, and that a potential buyer will as well should you ever need to sell.
STAY TUNED for the next topic in our series – DIY vs Professional remodeling, and their impacts on a home’s value.
At the end of our series we will reveal the value increase of this THA project – truly showcasing this family’s Return on Investment!