As a real estate professional, this is a question that I am often asked by friends and family, and not just those who are clients. Do you want the short answer? Well, the short answer is “garage door”. Confused or need more information, then please read on!

There are many reports and surveys that indicate expected costs for certain updates and the associated Return on Investment (ROI), but make sure to set your expectations based on what is right for you, your budget, and your location.

When trying to decide whether to invest in a project on your home, you should definitely consider the ROI as the expenditure may, or may not, affect the potential price of your home (or value in the eyes of a buyer or appraiser).

In my opinion, before taking on a big or costly project, especially if you are preparing to engage an agent for a listing in the near term:

• Compare updates of recent comparable sales to your home, and repair or update where appropriate.
• Consider what buyers targeting homes in your neighborhood or price range expect (condition, updates, finishes).
• Make them say “Wow!” (without costing them more, or at least too much of a premium).

A skilled real estate professional will arrive at a nuanced price using a variety of factors (internal and external characteristics of the home, recent sales, current market conditions, supply and demand etc.) to deduce what a buyer may be willing to pay for your house. The factors within the homeowner’s control relate to some of the home’s characteristics, particularly appearance and condition.

Despite how exciting a brand new kitchen or a new master suite looks on HGTV, it will not necessarily payoff for the homeowner. A reliable source for information (caveat that costs and results will vary) is Remodeling magazine’s Cost vs. Value Report.

Their 2018 report found that Americans should expect to make back only about 56% of the money they spend on renovations. That’s down from 64% the previous two years. So don’t start swinging a sledge hammer just yet!

While the 2018 report found that the ROI varied widely by project. A new garage door, for instance, should pay for itself, earning you a whopping 98.3% of your money back.  Surprised?

Check the chart out for Austin, TX to get an idea of the average cost and ROI for the report’s listed projects.

This doesn’t mean renovations are a bad idea, just remember what I said about being comparable and don’t overspend, unless you’re making the upgrades for your own enjoyment.

Short on ideas? Based on my experience with buyers, great curb appeal can set a sense of welcoming warmth. So it may follow that money well spent is focused where people look first, the front and exterior of the house, which is reflected with the report showing a fairly high ROI.  And don’t forget about landscaping!

Also based on experience, kitchens and baths can make or break a decision for some home buyers, so don’t overlook those areas despite showing lower ROI in the report. However, there are some things you can do on your own to make a big impact

One golden rule of renovation is that it can be effective and less costly to replace or repair than to add and remodel.

A few examples of what I mean:

• Either replace, or sand/caulk/paint, your front door and trim.
• Trim bushes, lay down fresh mulch, and plant some colorful flowers near the front door.
• Rather than replacing older cabinets, consider sanding the existing cabinets, and applying stain or paint to help them stand out.
• New cabinet hardware, light fixtures, or faucets can all bring new life to an older kitchen or bathroom.
• For bathrooms, you could consider hiring a professional to glaze over an older tub.
• Removing dated wall decorations and painting walls can leave a fresh feel, and a chance to update to trendier colors.

Hopefully you have some good ideas from this blog as to where to focus your energy, but make sure to also consider less fun things to fix.  Let’s face it, windows that don’t stay open, a roof that leaks, or an AC that doesn’t turn on all warrant more immediate focus especially if you’re planning to sell your home.

If you hire a contractor: Speak to at least three for suggestions and price comparison, and check references.  Make sure you are comparing the same work activities across all contractors, and make sure to be specific about how the work is to be performed in your agreement to avoid conflicts or surprises later on.

Feel free to reach out to me if you have any questions or want to share your thoughts, and check my blog or Facebook page weekly for more information on topics like this one.  I’d also love to hear how your projects are going, make sure to take before and after pictures!