Renovations
that pay
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outdated linoleum and harvest gold appliances might actually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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