Cindy's Blog

I know so many people who are starting, finishing, thinking about, or bidding on renovation jobs, and spring is almost here, so what better time to talk about where you might best spend your money and get the most back when you do go to sell.

Most people doing a major addition are planning to live there for a while, but in many cases, especially when the market is not so hot, folks start thinking about what they might be able to do to not just help them get a little bit more money, but what might help them sell a bit faster.

The 2007 Cost vs. Value Report from the National Association of Realtors and Remodeling Magazine is a great place for getting that information.

If we look at the information from the Richmond area only, there is some very interesting information to be found. For example, the return on investment from siding replacement is a surprising 102%! I think we all know that siding makes a huge difference, and I've worked with enough buyers and sellers to know that if it's a difference between hardboard and vinyl or composite/ cement siding, even if the one with newer siding is more, there's often no contest. But even I was surprised at the size of the roi on that one.

If we take the next five in the rank of return on investment, the next highest is an attic bedroom renovation/ finishing the third floor. The ROI on that is ranked at approximately 97%. Next on the list is a basement remodel, at just over 95% ROI. (Whew! That's next on our list, so good to know!)

The third most "profitable" renovation is going to be the minor kitchen remodel. While I agree that roughly 95% is about what the return would be, it really is usually kitchens and baths that sell houses, so while the dollar return may not be 100% or more, it certainly does translate into time on the market. So, if you're looking to do something in a shorter term, prior to putting your house on the market, something like cabinets, countertops, appliances, etc., can certainly make a difference, and are definitely a good place to put your money, from both a time and money perspective.

The fourth, going back to the same issue that bathrooms and kitchens usually sell the home, is a bathroom remodel. The ROI on this is right around 95%, but again, probably will translate into less time on market, most particularly, perhaps, if the other homes in the neighborhood have baths that are perhaps a bit older. (You never want to do too much "over improvement" because the other homes in the neighborhood will tend to at least to some degree, drag the value of your home down. But you are in good shape if your home looks that much better than the other homes in the neighborhood...obviously).

Finally, roofs and replacement windows are about neck in neck as far as the ROI goes in this area, at just over 90%. However, if you're going to stay in the home for a while, your return has to include the energy savings you will realize, particularly from the windows.

As always, ROI on renovations and additions are very local, and depend on a variety of factors. These are just some good guidelines, for both putting a bit of money into your home before you sell, as well as scheduling things that you may not be doing all at once, but want to make sure you're getting the "bang" for your "buck".