Which home improvements give the best payback?
What Home Improvements Make You Money?
When it comes to payback value of home improvements, some are definitely more profitable than others.
Not every home improvement has to cost a lot of money. Repainting, caulking, pressure washing and cleaning, landscaping, etc are all "sweat equity" and low investment improvements that make for great first impressions. Other more costly improvements are directly geared to realizing high profits. Here are a few of those:
-As a general rule, kitchen and bathroom projects usually get a nice return on investment, typically 90% or more!
-Things like adding rooms or finishing basements tend to pay back the least.
-Finishing a basement or room over the garage usually returns less than 50%, so it’s not a project likely to show profit at selling time.
There are a number of factors that go into determining how well a project will pay back. Payback value depends a lot on the current market conditions in your area. If the market is hot and homes are selling fast, you can expect a higher payback value than you would get in a slow market.
The type of project you do and how it fits in with other homes in the area can have a big influence on payback too. If you put your money into the wrong type of improvement, you won’t get your money back. But if you're smart about what you do, you can make money. The payback will be better on improvements that are in demand and conform to neighborhood standards. Adding a second bathroom in a neighborhood where most homes have two bathrooms will give a high return on investment. Building a large addition that makes your home twice as big as the other homes on the block probably won’t pay back very well. Likewise, the popularity of a project will factor into how much it pays back. An improvement heavily customized to your wants and needs won’t pay back as well as something more common to other homes in the neighborhood.
Another factor to consider is the cost of the improvements. If you can do the work yourself, you can save significantly on the cost of the project and greatly improve the chances of getting a good return on the investment.
One question we are often asked by home sellers is, "Will a pool add to a home's value?" The answer is yes,.. and, no! Yes, a pool could add value in a community where homes and yards are larger, and having pools is preferred and common. In some homes however, such as small homes, with littel yard space, a pool can actually detract from a home's value.
The list below is compiled from several published surveys and shows typical payback for some popular remodeling projects:
- Kitchen remodeling – 90%
- Add a bathroom – 90%
- Bathroom remodeling – 80%
- Install central heating – 90%
- Install central air – 75%
- Add a deck – 70%
- Replace windows – 70%
- Add a room – 55%
- Build a pool – 45%
- Finish a basement – 40%
Do you need help selling your home, not sure where to begin, want the most for your money but not sure how to get it ready to sell? Call on our team at Home Sales of Tallahassee. We will give you a free seller's consultation, complete with a marketing plan suited to your specific needs and showcasing your home in the best possible way.