Home Reno 101 / By Carol Wang / December 19, 2017
Putting Your Home on the Market? Consider Renovating
A few budget-friendly renovation projects that will pay off
Many Sweeten homeowners have either just moved into their new space or are renovating to stay put. Increasingly, we are seeing renovation projects aimed at resale. Whether you’re planning to put your space on the market soon or further on down the road, it’s smart to keep in mind the potential for resale, especially if you know that your current home is one you may outgrow. This is a clever way to approach your renovation—making it comfortable and customized to your needs while increasing your home’s attractiveness to potential buyers. Sweeten, a free service matching homeowners with vetted general contractors, executed simple renovations in this apartment to get it working better for its owners and increasing resale potential when the time comes.
If you’re moving sooner rather than later, your renovation should be strategic and targeted in the areas that will create the biggest difference to buyers with minimal cost to you. Walk around your home with your real estate agent and discuss whether there are any basic home improvement projects that might facilitate a quick sale for top dollar. While decluttering and staging should be the first steps, some homes do need a little extra. If yours falls into this category, ask yourself the following questions:
- Am I willing to accept a lower price per square foot to compensate for the condition of the apartment?
- Am I scared off by the hassle of a renovation project?
If your answer to both questions is no, it sounds like a renovation might be in your future! Even then, you don’t need to go overboard. Let’s break it down by category of homes and what kinds of changes make the most sense in each.
If you live in an apartment, most likely there is another entity—a co-op or condo board, in conjunction with a management company, who is responsible for the upkeep of the building systems and its exterior, as well as any peripheral landscaping. Neither you nor the buyer of your apartment will need to deal with these issues personally (unless you’re on the board…but that’s a whole different story.) As an owner, you’re responsible for “walls-in,” so it makes sense to focus on cosmetic improvements that will help your apartment show better.
The priorities are different when renovating a house for resale. Since homeowners are responsible for the whole building and the lot on which the house sits, there will likely be more pressing concerns beyond the color of the bedroom walls. (Also, buyers of townhouses generally expect to do some work on their new homes after closing.) This means that your money shouldn’t go to renovations but to repairs: ensuring that all systems are in good working order, that there are no structural issues, and that nothing on the exterior needs immediate attention. You’ll generally have to dig deeper into your pockets to fund these types of projects, but it’s likely that your house will sit on the market if you don’t address them. If you don’t deal with pressing repairs, and they come up during inspection, expect the buyer to ask for credits at closing in order to compensate for them.
Let’s discuss one-off projects as well as whole-room projects for both apartments and houses.
- A fresh coat of paint – Especially if the current colors are very bright or unusual. You might love lime green, but it’s safe to say that many buyers won’t. Many homeowners can repaint themselves, but sometimes, it’s worth calling in the pros.
- Update the kitchen cabinet fronts – You can do this a number of ways—simply sanding and repainting the existing surface is the most budget-friendly, or you can choose to replace the doors and hardware while leaving the interior boxes in place.
- Change out your fixtures – If your lighting and plumbing fixtures look like they are from the ’80s, and not in a good way, consider switching them out. You don’t need to go high-end; there are plenty of good-looking options at big box stores. Pick something with clean lines and muted colors. For plumbing fixtures, you can’t go wrong with a stainless steel or chrome finish. Yes, brass is all the rage—but you’ll have to decide whether it’ll go with the existing aesthetic.
- Refinish your floors – If they are scratched, peeling, or look damaged, this is a must. Any sign of water damage, for example, is not only an aesthetic problem but is also an indicator to buyers that there may be a history of leaks in the building. And if you have carpets…this is a huge turnoff for many buyers, so consider replacing them.
- Rip out outdated trends that serve no function – This applies to vinyl faux-wood paneling, weird glass block walls, and “decorative” room dividers that are now just eyesores.
And if you’re up for whole-room projects, here are the ones that will facilitate a sale:
- Kitchen update – This is an important space for buyers and is often immediately visible upon entering the apartment, so you’ll want to focus your attention here. You can refurbish cabinet doors, as well as replace hardware and fixtures. You can also go further, and replace the countertops and backsplash. Visually, these make the biggest impact. If you have a very dark kitchen, going lighter will appeal to buyers.
- Bath update – After the kitchen, this is the most important space in an apartment. Particularly if there is just one—it’s important to make it look functional and clean. The easiest and most affordable ways to update the bath are to paint and change out the medicine cabinet-mirror for an updated model. Updating the tile, vanity, and reglazing the tub will also be good ways to freshen up the space.
- Adding a “flex space” – While it’s impossible to add actual square footage to an apartment (unless you’re combining apartments!), it’s often helpful to add the idea of one. This can be done by putting up pressurized walls to carve out an office nook, or by adding sliding doors across a large living room to create a den space. While this type of renovation won’t change the legal designation of the number of bedrooms in your unit, it helps buyers envision more uses for the space.
If major systems are all in good shape, and you’ve also taken a look at the interior renovation project list above, then consider exterior renovations—a.k.a. “curb appeal”—that you can undertake to improve resale potential:
- If you’re lucky enough to have a driveway, make sure it’s in good shape.
- Upgrade your front door to a solid wood or steel model if it’s looking shabby.
- Change out your house numbers if they are old or worn or hard to see from the street.
- Invest in some landscaping: a few larger plants, alongside planters next to the entry, can make all the difference.
- Repaint the exterior.
As all of these examples show, focusing your time and money on remodeling the most visible parts of your home tends to have the best value. Buyers don’t typically get to spend much time in a home before they decide to buy it, so first impressions are incredibly important. According to Realtors®, the interior updates most likely to appeal to buyers are kitchen renovations, kitchen upgrades, bathroom renovations, and new wood flooring. For interior projects, refinishing hardwood floors will recover 100% of the cost upon resale, while on the exterior, new roofing will recover 109%. In 2017’s Cost vs. Value Report, a minor, mid-range kitchen remodel in New York City, costing just over $20,000, will recoup 80.2% of its cost at resale. On the other hand, a major, mid-range kitchen remodel, at $62,158, will only recoup 65.3% of the project cost at resale. Remodeling your entry door for curb appeal costing $1,413 recoups 90.7% on the national average. So these are the major takeaways:
Focus on what you (and buyers) can see.
If you need to prioritize, start with the most outdated/worn items.
For the best return on investment, don’t choose the most upscale options. Mix low- and mid-range materials and finishes to create a look that will be pleasing to most buyers.
A final piece of advice: In a highly-localized market like metropolitan cities, it’s important to make these decisions in consultation with your real estate agent. What works in one neighborhood might not work in another. He or she will be the best person to guide you on where it makes sense to invest in a renovation. Keep in mind you don’t need to spend a lot of money to upgrade your home. Weigh the financial and time costs, and consider whether you’d take a lower purchase price to save yourself the trouble. And remember, it’s not about recouping the exact value of the renovation in the sale price, but getting buyers to make offers in the first place!
If you’re on the other side of the equation—closing on a new home and planning a renovation for yourself to live in, rather than renovating for resale—check out our do’s and don’ts on closing and renovating.
Refer your renovating friends to Sweeten and you’ll both receive a $250 Visa gift card when they sign a contract with a Sweeten general contractor.
Sweeten handpicks the best general contractors to match each project’s location, budget, and scope, helping until project completion. Follow the blog for renovation ideas and inspiration and when you’re ready to renovate, start your renovation on Sweeten.