Why it makes sense to invest in your home before bringing it to market. In other words, don’t wait.
The personal stories of one Realtor’s battles and triumphs in the highly-competitive Bay Area Real Estate Market, seeking to illuminate and humanize the very real ups-and-downs of homeownership.
The Spring Market is upon us and the question most often asked by prospective Sellers who are contemplating a move is: “What’s the best return on my investment?” To be blunt, your results are often dependent on the health of the house, the improvements we make, its underlying condition, and the price we set. (Not surprisingly, Sellers are often resistant to our initial suggestions, but DO want the highest selling price.)
No amount of staging, no matter how masterful, will overcome an overpriced house. (Clear?) With the understanding that not all home improvements are created equal . . . and that achieving top-dollar will likely require an investment on your part, the best ROI for home improvements when selling your home (which is different from remodeling for personal use), will depend on a few key factors (some of which we control and some of which we do NOT), such as supply & demand, the property’s location, the quality of the work, and the house itself. With higher interest rates at play, Buyers naturally expect more when plunking down their hard-earned dollars.
While there are a lot of factors at play, Curbio – a national real estate remodeling firm – gathered information from their past projects (they’ve remodeled hundred of homes) to give you a list of the best return on investment home improvements, in order of importance.
Whether you agree or disagree, here’s what they found . . .
- Kitchen Refresh: Average ROI: 377% On average, the best return on investment for home improvements is a kitchen refresh. Instead of tearing down your cabinets and changing your kitchen layout, a refresh involves making minor cosmetic updates to your existing kitchen setup. Work can include installing new appliances, painting cabinets, replacing old countertops, and updating hardware. Because the kitchen is such a focal point of the home, these small updates can have a BIG impact on the money coming back into your pocket.
- Refinished Hardwood Floors: Average ROI: 348% Over and over again, we have found that one of the top ROI home improvements is refinishing hardwood floors. So, if you already have hardwood flooring in your home, then you are in luck. Simply taking the time to refinish them can make the floors look like new and have a huge impact on your return on investment.
- Minor Fixes: Average ROI: 297% Most homes benefit from some paint, hardware swaps, new lighting, and deep cleaning. Because these fixes can have a big impression on the look of the home but have low project costs, they often have a high return on investment.
- Roof Replacement: Average ROI: 288% Not only is a home’s roof a big part of its curb appeal, but an old roof can also be a red flag. Buyers do not want to have to think about repairing or replacing the roof of their new home. Instead, a new roof increases home value and can result in a big payoff for Sellers in many cases.
- Carpet Replacement: Average ROI: 280% A damaged, stained, or a jarring-colored carpet can send prospective Buyers running for the hills. A simple fix is to replace the carpet before selling. Not only can this work transform the look of the space, but it also comes with a high home improvement ROI.
- New Hardwood Flooring: Average ROI: 276% Instead of replacing old carpet with new carpet, you may want to consider installing hardwood flooring. While on average new hardwood flooring has a slightly lower return than replacing the carpet, both have a high return on investment, and one may be more lucrative than the other depending on the space. In Piedmont, Buyers prefer hardwood over carpet every day of the week.
- Bathroom Refresh: Average ROI: 256% Buyers are looking for modern and luxurious bathrooms, so a dated (and often well-worn) bath just won’t cut it. A quick bathroom refresh is an easy way to turn that neglected space into a room that appeals to modern buyers. Work may include painting or replacing vanities, updating lighting, installing attractive hardware, and reglazing the bathtub.
- Tile Installation: Average ROI: 254% Tile flooring can be a good choice for areas like the bathrooms, kitchens, laundry rooms, and entryways. Make sure you choose a modern design and replace old flooring to get the highest return on investment with this project when you sell.
- Landscaping: Average ROI: 251% Your home’s first impression is often tied to how it looks from the outside, and landscaping is an easy way to increase curb appeal without having to throw down a lot of cash. Simply weeding gardens, trimming shrubs, and planting perennials could have Homeowners walking away with more at the time of closing.
- LVP Flooring: Average ROI: 235% LVP stands for “luxury vinyl plank” flooring. It can provide the look of hardwood floors but with lower maintenance and less costs to install. As a result, project costs are lower, but the modern appearance still leads to a high return. These are best installed in below-grade rooms – not in formal living and dining rooms.
It’s worth noting that ALL of these improvements are upgrades the Buyers can see (as opposed to new plumbing or wiring), as the vast majority of Buyers are seeking “turn-key” properties, which means those long-ignored “to-do” items should be tackled before bringing your property to market. While not every improvement will see multiples of X, an updated, fresh, and younger presentation IS far more likely to sell the house quickly, which is the ultimate goal. Homes that languish on the marketplace sell for less than their counterparts that traded in a reasonable time frame.
Remember, when searching for available housing stock, prospective Buyers will go online first, so think photos, think Instagram, think Tik-Tok, think PRESENTATION(!), and above all else, think objectively.
Finally, what hurdles did you need to overcome in order to buy the house when you purchased it?
If they still exist, the next Buyer will likely have these same objections. On the other hand, if you “cured” any disfunction, so much the better. If not, let’s redirect the eye, and that’s where staging comes in. Creative and quality staging is the exclamation point of the entire process and typically proves to be a Seller’s BEST investment by far; it’s the bait that gets Buyers off of their computers and over your threshold.
In short, staged homes create the emotional hook required to attract strong market demand. While it may not be as easily quantifiable, staging is the cherry on top of the proverbial sundae, and isn’t that sweet?(Yes, it is.)
How can we help you?
Julie Gardner & Sarah Abel | Compass Realty
Not just Realtors, but consultants in all things house and home, we’re here to educate, explore, examine and refer . . . In short, you may count on us to take care of your home as if it were our own and anyone who knows us, knows we take pretty darn good care of our homes.