Homeowners typically will weigh the cost of a home renovation project against the value it will add to their house. But the pleasure of enjoying a new kitchen or bathroom should be considered, too, according to a new report from the National Association of Realtors (NAR), with insights from the National Remodeling Industry.
Let’s look at the kitchen renovation, for example. A little over 60 percent of the cost of a major kitchen remodel is recouped by the homeowner, according to the NAR report. But, the project earns the top score for the joy it brought homeowners, a perfect 10!
The 2019 Remodeling Impact Report examined 20 renovation projects and ranked them according to how happy homeowners were with their renovations. The study also measured return on investment. The top three projects with the highest “joy score” were kitchen renovation, closet renovation, and a full interior paint job. Renovations with the greatest return on investment were new roofing, new hardwood floors, and refinished hardwood floors.
So, should you tackle projects that will make you happy or ones that will add the most value to your home? Here are three factors to consider:
- Even if you’re not planning a move, ROI is an important consideration. Life is full of surprises and you never know when you may need to sell. ROI is as important for the young millennial family who just moved into their first home as it is to the Boomer couple looking to age in place. By choosing the correct projects, you can enhance the functionality, livability, and beauty of your home while increasing property value at the same time.
- Not all remodeling projects are created equal. Purchasing a home is often the biggest investment any individual makes, so it is wise to carefully consider any work that affects that investment. The improvements should be in line with the value of a home, just as the cost of a home should be in line with the neighborhood it’s in. So, while a homeowner might enjoy heated floors and imported tiles in her master bath, the cost of the renovations may exceed the value in the long run. By researching the value of specific renovations, homeowners can avoid unpleasant surprises when it’s time to sell the house.
- ROI can vary significantly depending on the local market and local buyer preferences. Generally speaking, remodeling a lower-priced home will increase the home’s value more than remodeling a higher-priced home. A brand-new kitchen in a starter home will stand out more than an upgraded kitchen in a luxury mansion. In higher end neighborhoods, installing a swimming pool may add more value. In colder areas, attic insulation may make more sense. Local variables need to be considered.
Should you do it? Back to our kitchen renovation example: what I’m seeing in the marketplace is buyers who are looking for HGTV-ready kitchens that are modern and beautiful, and also highly functional with state-of-the-art appliances, attractive light fixtures, and new hardwood floors. What’s more, today’s lifestyles center around the kitchen. It’s understandable that a completely renovated kitchen brings homeowners joy, and from my experience, an updated, sparkling kitchen can help seal the deal when it comes to selling your house.
My advice? Talk to your realtor about the local market. Balance your immediate desires with the big picture. Choose remodeling projects wisely. Avoid lavish lighting and ornamental wall finishes that are on trend today but may be out of date in a few years. The cost of highly personalized additions such as a children’s theatre, elaborate home gym with rock climbing wall, or indoor hot tub may never be recouped. In addition, steer clear of custom finishes. A large nautical star in your entryway floor may appeal to the boat lover in you, but not to a potential buyer with Western ranch on his mind.
If you’re planning to stay in your house for a very long time, and remodeling will enhance your enjoyment of your home, it may make sense to follow your gut on renovation projects. But ROI should always be a consideration. And remember, it’s not a one-size-fits all model. I’d be happy to help you evaluate your potential projects, and to talk to you about what’s selling in the Rye and Westchester real estate market.
For more information, call Fiona Dogan at 914-414-5147 or email her at Fiona.firstname.lastname@example.org