Home improvement websites and retail stores often extol the virtues of home remodeling. However, it's not really all it's cracked up to be. While adding or replacing parts of a home is usually less expensive than buying an entirely new one, remodeling projects rarely offer a full return on investment, and almost never end up paying the dividends that owners may be promised.
For example, take a look at the National Association of Realtors' 2015 Remodeling Impact Guide. Few renovations are able to recoup more than 80 percent of their initial investment. Replacing the front door of a home may be among the most common and inexpensive projects an owner can undertake, but even this doesn't show much promise for earning money back. With a median installation cost of $2,000, a new steel door will recover 75 percent of that initial amount on average.
Other popular but pricey projects offer an even smaller return. Kitchen overhauls are among the most popular projects undertaken by homeowners every year. However, according to data from NAR, they tend to recover just 67 percent of their initial investment. The price tag on this project often runs in the five-figure range, with a median cost of $30,000 nationwide. As for additions like new rooms or floors, these of course depend on the exact size, but will still cost homeowners a pretty penny.
Getting paid to spend money is certainly an ideal arrangement, but unfortunately is a rare occurrence in the world of real estate. That's why experts recommend remodeling projects be done with an owner's satisfaction in mind, rather than a big payoff when it's time to sell. The National Association of Certified Home Inspectors suggested budget-conscious home-dwellers keeping an eye out for these warnings when planning a remodel:
- Bigger isn't better: Unless your finances are plentiful, don't upgrade a home just to make it more spacious or luxurious.
- Making a statement: As much as you might love the idea, a fireman's pole slicing through your living room is unlikely to attract interest from future buyers. Keep renovations under control when it comes to personal tastes.
- Simply trying to making money from paying for materials and services at retail prices. It just doesn't happen as often as many believe.
These tips may have just deflated your remodeling bubble. Never fear, though, because it's entirely possible to achieve some of the same goals as an expensive renovation on a much tighter budget.
The main goal for achieving a revitalized home on a dime is to refurbish instead of renovate. According to NACHI, this is the top piece of advice real estate agents will give their clients before they spend unnecessary cash on additions. For example, rather than ripping out the kitchen sink - and everything else - just reglaze the appliances. This will give a fresh look to even very old sinks, counters, stoves and other fixtures.
A fresh coat of paint will achieve the same goal, and can be done for a fraction of the cost of many remodels. A new layer of paint makes a room sparkle and shine as if it were brand new. Even better, it can be done without professional help in many cases - although homeowners can still save a little with the right contractor.
For the best return on your investment, it's hard to beat a deep clean and a smart use of space. For home sellers looking to turn their place around on the market quickly and affordably, it's hard to beat this method.