Return on your Home Improvement Investment
Lately I’ve had several questions from people about what different type of renovations give the best return on their investment when they sell. With the popularity of do-it-yourself remodeling many people are tackling more and more projects. Many home improvement projects may sound valuable to the person doing it but in reality a potential buyer may not care at all about the renovation.
One popular renovation that many people tackle is finishing a basement. However, according to recent polls most basement renovations only return about 50% of your investment. So a typical basement remodel that costs $25,000 may only net you $12,500 when you sell the house.
The two most rewarding renovations are remodeling your kitchen or bathroom. Typical kitchen and bathroom remodeling projects return between 75% and 90% of your investment. Not only are those projects financially rewarding kitchens and bathrooms really do help sell the house. An updated kitchen can make the difference between your house and one down the street thats still stuck in the 80′s!
One statistic that I read I have a hard time believing. The article said that fireplaces and decks only yield about 10%, or the same as installing a hot tub or pool. While I can see the argument for the the hot tub and pool I tend to disagree with the fireplace and deck. I think fireplaces and decks can make the difference in your sale and while that may not relate directly to your investment, selling versus not selling can add up to significant dollars.
The bottom line is when you plan your next home improvement project make sure you evaluate why you’re doing that project. If you’re doing it to help sell your house in the future you may spend you money on the kitchen or bathroom. If you’re doing it for your own enjoyment than the hot tub or pool might be just the thing you need.
Home Improvement Investment
Home Improvement
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I also have seen the surveys/reports, etc. that claim the return on investment for finishing a basement is much less than other projects, but that information really is in conflict with what I see everyday.
As an exclusive buyer broker, I accompany potential home buyers to homes all the time. My buyers usually are quite excited about a finished basement or a basement that has the potential to be finished.
Interesting …
I tend to agree with you. I think the point here though is given two identical houses, one with a finished basement and one without, will the finished basement return the actual cost or will it return less but make the sale happen quicker?
Perhaps the survey is taken on a nation wide basis. I can see where a fire place in Florida may not have much appeal, however, anywhere in the northeast, it should be a good selling point.
No doubt the are a good selling point. The real issue here is whether the investment pays off during the sale. Or does it just make it easier to sell? I can see arguments both ways.