What’s the secret to selling your home for a higher price?
More often than not, it’s about the time, money and effort you devote to the property while living there. The more updates and proper maintenance put in, the more likely you are to see it reflected in the final sale price when you put the home on the market.
But not all renovations are equal, and some make for a better return on investment when it comes to sale prices.
When you’re making renovations to a home, how do you know what’s a solid investment? A worthy update can either serve to reduce your cost of living while you remain in the home or add significant value to the home sale price when you decide to put it on the market.
Throughout any renovation process, it’s key to consider mass appeal for the sake of resale value, says Scott McGillivray, a real estate investor and host of the HGTV show “Income Property.” You can’t guarantee you’ll find a buyer with a specific style preference or interest, so leaning on the side of neutrality helps house hunters see the potential to personalize after they’ve purchased the home.
“You’re selling a lifestyle when you’re selling a home,” McGillivray says. “You definitely want to think about the demographic, but you want to be broad about that demographic as well.”
The best way to make a big splash is to focus on the parts of your home that are the most visible, says Mischa Fisher, chief economist for ANGI Homeservices, a digital marketplace for homeowners to connect with home service professionals. That means a new front door, landscaping or an updated foyer can help make an impact with buyers.
“The best ROI opportunities are those high-impact, visual opportunities,” Fisher says.
Kitchens and bathrooms are often the go-to rooms for renovations to attract buyers since they’re the rooms many house hunters seem to care about most. But Remodeling Magazine’s 2019 Cost vs. Value report states that a major upscale kitchen renovation will recoup just 59.7% of the cost when the property sells, and an upscale bathroom remodel will recoup just 60.2%.
That doesn’t mean you should avoid making changes to the kitchen or bathroom at all. Instead, consider smaller changes that may help your ROI. Plus, minor updates are far more feasible with a limited remodeling budget.
When you establish your budget to take on a home improvement project, be sure you’re taking the need for skilled and licensed labor into account. You may think you can cut costs on a bathroom remodel by replacing the tub or installing a new light fixture over the shower yourself, but the plumbing and electrical work may get you in over your head.
Do-it-yourself work on key systems like electric and plumbing, when done poorly, can lead to a far greater cost than hiring a professional from the start. You could cause a fire hazard or damage to the interior of the house that isn’t to code. “Avoid doing anything to your home insurance (policy) or exposing anything to liability,” Fisher says.
Whether you’re planning to remain in the home for a while or looking to freshen up the place to put it on the market, here are some updates that experts say will give you the most bang for your buck:
- Bathroom vanity.
- Energy-saving thermostat.
- Garage door.
- Solar vents in the attic.
The quickest way to make a room look new again is to add a fresh coat of paint. “Paint has one of the highest returns on investment, but the color choice and the contrast and the variety that you use can have a big impact,” McGillivray says. To make it worthwhile, keep any newly painted rooms neutral. Homebuyers often see the amount of work that would go into painting over a bright red wall, and may even ask the seller to paint over it themselves.
Adding a backsplash to your kitchen can take make a world of a difference, and it doesn’t have to cost a lot. HomeAdvisor reports that backsplash installation costs, on average, $1,000. A backsplash isn't particularly difficult to install yourself and doesn't take long to do, but like other DIY opportunities around the house, it's not a project to complete sloppily if you want it to add value and appeal to your home.
Old windows on a house can be an eyesore, not to mention a pain to open and close. Zillow reports replacement of midrange windows can see an ROI up to $1.15 for every dollar spent on the project, but that profit decreases with more upscale windows. New windows can also have the cost-saving benefit of cutting down on drafts and increasing energy efficiency. Especially if you’re not planning to move yet, consider the possible reduction in utility bills when you look at your bottom line.
Attractive cabinets are key to an enticing kitchen, but that doesn’t necessarily require brand new cabinets. Remodeling Magazine’s Cost vs. Value report notes that replacing just the cabinet faces with a Shaker style as part of a minor kitchen remodel in the midprice range can bring back 80.5% of the cost when it comes time to sell. If you have the classic five-piece, framed look characteristic of Shaker cabinets and they’re in pretty good shape, refinishing or painting is a great alternative.
The bathroom is another key room for buyers, so giving it a face-lift prior to sale is important. Like the kitchen, you don’t necessarily have to do a massive overhaul. Real estate information company Zillow reports a minor bathroom remodel consisting of new light fixtures, tiling the floor and adding a double vanity can result in a $1.71 increase in the value of the home for every dollar spent on the project. HomeAdvisor reports a premade double vanity will cost between $600 and $2,200 to put in your home. Based on Zillow's estimate, you could see your home value rise by more than $2,500 for the more luxurious bathroom look.
The exterior of your house can take a beating from rain, snow, hail and dirt, and after a while it shows. The Cost vs. Value report notes new siding will recoup 75.6% of the cost when you sell your house. Replacing part of that siding with manufactured stone veneer, however, will have a bigger impact. Homeowners who install a stone veneer on their house – usually on the bottom third of the exterior – see as much as 94.9% of the cost come back in the sale price.
If you have one, don’t get rid of it. A 2016 Angie’s List survey of more than 100 real estate agents across the U.S. found more than 68 percent believe having a fireplace in a home increases its value. The vast majority of real estate agents – more than 83 percent – see fireplaces adding between $1,000 and $4,999 to the home’s value, according to the survey.
A smart thermostat, like the Nest Learning Thermostat, that can learn your habits and turn heat or air on only while you’re home serves as a great potential saver on energy bills. While it might not increase a home’s value significantly, the amount you could save on utility bills is worth the $250.
A new garage door may not provide the same enjoyment that a brand-new kitchen might in the interim before you sell, Fisher points out, but this project has a visual impact on a house you’re planning to put on the market soon. Remodeling’s Cost vs. Value report shows replacing a garage door can recoup 97.5% of the cost in resale.
Solar Vents in the Attic
This update probably won’t go widely noticed when it comes time to sell, but solar vents in the attic are worth it if you’ll be in the home a while. The vents help to expel hot air in the attic in the summer, which has a tendency to keep your air conditioner working harder to keep the home cool. HomeAdvisor reports most homeowners spend between $342 and $752 for an attic fan installation, including the cost of the fan itself. Installing solar vents will likely cost about the same amount. The vents themselves vary widely in price from $100 to more than $550, so it's best to check out reviews and determine which option would be most effective for your home.
The house’s curb appeal is often undervalued by homeowners when they put their home on the market. But as the first thing any house hunter will see when they come to tour the home, it’s important to seed any dead patches of grass, mow the lawn regularly and add a bit of color with flowers or bushes without overwhelming the yard. “Making a good first impression is overall good ROI,” Fisher says.
Updated on April 26, 2019: This story was originally published on May 6, 2016, and has been updated with new information.
She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.
Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at firstname.lastname@example.org.