While homebuyers’ purposes for purchasing a home always fall on a spectrum somewhere between purchasing a home to live in for the rest of your life to a home that you will sell in a few months for a profit, every rational person should operate on the fundamental principle that if something is an efficient expenditure it should be invested in. An efficient expenditure, in relation to homes, is an improvement that provides a strong return on investment (“ROI”); what qualifies as strong is a little more subjective. The Chernov Team isn’t interested in hiding the ball, so we'll just tell you what the best upgrades are – remodeling your kitchen with top-of-the-line appliances, renovating your bathroom, and redoing the master suite. The best improvement for ROI is a new roof, which can actually increase the value of your home more than the cost of the improvement itself.
Surveys show that people who remodel their kitchens by replacing old surfaces and applying new finishes/materials end up wanting to spend more time in their homes after the job is done. If it has that impact on the owner, imagine what it will look like to a fresh set of eyes! Unfortunately, you need to have quite a bit of liquidity to get the job done. Talking numbers, it could cost you as much as $68k to fully remodel your kitchen, but you are looking at an increase of roughly $40k to your home’s value (59% ROI)
A close second in terms of efficient spending is renovating the bathrooms; this will cost roughly $35k, but will increase your home’s value by about $20k (57% ROI); it is important to note that the more you spend on the renovation, the less the ROI will be – there seems to be diminishing returns on investment after $35k. Coming in for the bronze, renovating your master suite can cost upwards of $150k, and will increase the value of the property by about $75k (50% ROI). Clearly these aren’t improvements you would make just for the purpose of selling, but it’s good to know that as you live in the home and update it that these are the kinds of returns you can expect when it is time to sell.
Some of the less flashy improvements can actually increase the value of your property beyond the cost of making those improvements; so always make these improvements. First, installing a new roof will cost roughly $7.5k for an average sized home, and will increase the value of that home by $8,000 (107% ROI); that’s free money. Similarly, installing new wood floors will cost about $4,700, and will increase the home’s value by $5,000 (103% ROI).
At the Chernov Team we understand that knowledge is power, and knowledge of how to renovate your house with an eye towards cost-efficiency is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.