The prevailing urban myth is that home owners often undertake major renovating projects to upgrade their homes with an eye of putting them up for sale. The current thought is that renovations always send the price of the property soaring.
Unfortunately, this is not always true.This outlook is very much pronounced between investors and some Home Renovations Mount Gravatt owners themselves where the groups think different reasons on why they need to renovate.
Investors (who buy and sell houses) and real home ownersmost usually have differing ideas regarding the end goals in renovating their property.
With regards to renovations, investors hang on to the prevailing thought that all upgrades,in many cases, pay for themselves after some time.(For owners, the practical goal, however, is to renovate the property with the main purpose of adding value to it.)
Investors look at upgrading an investment property done in the right way as a sound strategy. Successful fix-it-and-flip-it professional investors focused on one goal: “Buy low, sell high.”
Investors are the people who purchase run-down homes at bargain prices. They also. know that a little sweat equity goes a long way toward making a real estate investment profitable. Most often, they cut costs by doing most of the repairs themselves.
Choosing the projects
Investors carefully choose remodeling projects that will result in the most value for the least amount of effort and cost. In the process, the first step is to assess the other homes in the neighborhood to avoid over-improving the property.
For example, if none of the other houses have crown molding and high-end countertops, adding these amenities to a fix-it-and-flip-it project is unlikely to result in a significantly higher selling price.
On the other hand, owners often take a less strategic approach when sprucing up their homes. As a result, they can end up putting significantly more money into a project than they will get back out of it when they sell, if they do decide later.
This move of a few improvements is certainly a smart one. While it’s certainly a smart move to make, it is not wise to overdo it in the expectation of a return at resale.
In order to make the most of your renovation project, it pays to understand the typical return on investment from the four types of renovation project. These include the basics, curb appeal, best bang for the buck, and passion projects.
- The Basics
The basics are the typical things that every buyer expects when they purchase a home. This includes a roof that doesn’t leak, functioning gutters and downspouts, a dry basement, and a reliable furnace.
They also include solid floors, walls that are in good repair, retaining walls that work, and functioning plumbing and HVAC systems.
Potential buyers of any home—even first-time buyers—have a checklist that includes all of these amenities.
In upscale properties, the basics might also include a number of bedrooms, bathrooms, and multiple-car garages, plus any other features common to the neighborhood.
This does not mean you have to upgrade all of it. You may focus only on regular maintenance and smaller, cheaper improvements that keep everything in good working order.
Adding the basics to a home that lacks them doesn’t add value. It merely brings the property up to the standards of the rest of the homes in the neighborhood. This ensures you can ask a comparable price.
On the other hand, while you may want your house to stand out from the competition, you shouldn’t make upgrades that greatly exceed the neighborhood standard. Not only will you end up losing some money, but you may also scare off potential buyers.
In other words, before you invest tons of money in an elaborate renovation project, consider what the competing properties in your neighborhood have to offer. Find out how similarly priced homes in your neighborhood measure up.
Then, you make improvements based on your specific marketplace.
- Curb Appeal
Curb appeals are those projects that make the property look good as soon as prospective buyers arrive. While these projects may not add a considerable amount of monetary value, they will help your home sell faster.
This works on the premise that a positive first impression cannot be underestimated.
From a well-manicured lawn, low-cost landscaping, fresh paint inside and out (at least the front door), clean carpets, and new exterior fixtures can work up the appeal magic.
Another important feature for both exterior and interior of your homeis lighting. Don’t overdo it, though. While you want the house to look bright However, inviting this may be, installing simple lighting is just as good.
In renovation, you can make mistake on plain vanilla designs. However, this is not the time to include bold design choices into the décor.
Consider subtle and tasteful designs that appeal to a wider audience. You can always consult an interior decorating professional. Only, make sure you lean toward inexpensive choices.
- Best Bang for the Buck
Renovation projects that add the most value at resale are the favorites of fix-it-and-flip-it professionals. For practical purposes, they should be high on a homeowner’s list, too. While these upgrades may not recoup all of their cost, they can come close.
In a joint study with the National Association of the Remodeling Industry, wood flooring(new or refinished), insulation upgrades, basement conversions, and closet renovations had the highest return on investment.
They often recoup about 80% or more of their cost at resale. The other exterior work – roofing, garage doors, new sidings — also delivered a lot of bang for the buck at resale.
- Passion Projects
Investments that homeowners make in activities they love without regard to cost, including anything from swimming pools and tennis courts to hot tubs, wine cellars and game rooms are usually called passion projects.
These cool projects are very expensive for the homeowners to install—and most prospective buyers (who don’t share their passion) are unlikely to pay more for the home just to get the tennis court.